Gold Rush is over for bitcoin, but it has portfolio value, Betterment says

It’s been another wild week for bitcoin.

The cryptocurrency rose 11% on Friday, bringing it back over $ 40,000 for the first time in two weeks. A few days earlier, it had dropped below $ 37,000.

But while bitcoin remains volatile, Betterments Dan Egan says it is becoming a portfolio.

In the early days of bitcoin, for example, it was seen as a sudden path to wealth – now it functions more like a “digital gold asset” that can provide a market hedge, he told CNBC’s “ETF Edge” on Monday.

“It’s definitely maturing into more of an alternative like gold or precious metals,” Egan said. “You should have a small portion of it in your portfolio just for the sake of diversification.”

Still, bitcoin prices are far from the highs set in November. The crypto traded at close to $ 70,000 at its highest.

Alternative exposure to bitcoin can be found in the ETF area. Bitcoin prices rose last year after the launch of the first bitcoin futures ETF, ProShares Bitcoin Strategy ETF (BITO), in October.

This futures ETF is useful for both long-term and short-term investors, ProShares’ Simeon Hyman said in the same “ETF Edge” interview.

“The futures market, if anything, is a better reflection of the price and more liquid,” he said. “BITO in itself trades lots of volume every day, and there are opportunities for that, too.”

Last week, the US Securities and Exchange Commission rejected Fidelity’s application for a bitcoin ETF, but BITO still keeps its promise, Hyman added.

“The futures market [has] several exchanges that converge on the price of these futures, “he said.” There are important benefits when you combine it with the ETF structure that makes it a pretty compelling value proposition. “

The BITO ETF has risen 5% this month, although it has fallen 12% for the year.


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