Day by day, more and more people are starting to invest in cryptocurrencies such as: Bitcoin (Cryptocurrency: BTC). It's not difficult to understand why. Over the past 10 years, S&P500 The value has increased by approximately 278%. Meanwhile, Bitcoin's value soared more than 17,000% during the same period.
Most investors only need one ETF if they want to bet on cryptocurrencies and add significant growth potential to their portfolio.
There's a reason why Bitcoin has become so popular
Six years ago, legendary investor Peter Thiel summed up the pitch for investing in cryptocurrencies when he spoke about Bitcoin: “Money is a bubble that never bursts.” Consider the US dollar. It has value because everyone believes it has value. There are several forms of backstop value, such as military power and the power of taxation. But in general, currencies like the US dollar, and even stores of value like gold, have value because everyone agrees that they have value.
When it comes to investing, the rule is usually to find opportunities that generate hard value in the form of distributable cash flow or real-world profits. Betting on what other people think a stock is worth can be a dangerous game. That's why most professionals build complex models and perform financial analysis to determine whether the price they're paying for an investment is worth the ultimate reward.
Currency, or more colloquially, “money”, is an exception to this rule. Dollar bills don't create more dollar bills. That's not where their value comes from. Their value at a core level is as a social instrument. Everyone agrees that it represents the value of the effort expended to obtain it. Bitcoin works in much the same way. It is considered a proof-of-work cryptocurrency, meaning miners are continuously working on it. In this case, they solve complex mathematical problems to produce more Bitcoins. And while it has less of a direct function as a form of currency, it was the first time a form of currency was created that did not involve major or other centralized states.
Of course, there is a lot else going on in the cryptocurrency world. And just as the internet continues to do, cryptocurrencies in general could find their way into our daily lives in ways we didn't expect. But regardless of whether those ventures are successful or not, Bitcoin will always “work.” That is, it always retains the ability to function as a form of money and a store of value.
This is the only crypto ETF you need
Due to these factors, most everyday investors only need one ETF to gain exposure to cryptocurrencies. iShares Bitcoin Trust ETF (NASDAQ:IBIT).
As its name suggests, this ETF tracks Bitcoin's price performance without investors having to deal with the complex custody issues associated with buying Bitcoin directly. Currently, the fund's expense ratio is just 0.12%, which is even lower than most actively traded funds. Also, because the fund only tracks Bitcoin performance, you don't have to worry about betting on a rapidly changing ecosystem of crypto startups whose future is currently anyone's guess. there is no. Decades from now, Bitcoin will probably still be around, but the long list of crypto ventures launched in recent years may be a thing of the past.
The best part about investing in crypto ETFs like this is that dollar-cost averaging is easy. For example, if you purchase this ETF for $50 per month, you will be continuously invested throughout Bitcoin's somewhat volatile trading range. That way, you won't have to worry about market timing as you will be sure to buy when the price is high. and When Prices Are Low — It's a smart investment strategy, but it's a little trickier when buying Bitcoin directly.
Don't miss out on this potentially lucrative second chance
Have you ever felt like you missed out on buying the most successful stocks? Then you'll want to hear this.
In rare cases, our team of expert analysts “Double Down” stock Recommendations for companies that are likely to take off. If you're already worried that you're missing out on an investment opportunity, now is the best time to buy before it's too late. And the numbers speak for themselves.
-
Amazon: If you invested $1,000 when it doubled in 2010; you have $21,121!*
-
apple: If you invested $1,000 when it doubled in 2008; That's $43,917!*
-
Netflix: If you invested $1,000 when it doubled in 2004; That's $370,844!*
We currently have “double down” alerts on three great companies, and we may not see an opportunity like this again anytime soon.
See 3 “Double Down” stocks »
*Stock Advisor will return as of October 14, 2024
Ryan Vanzo has a position in Bitcoin. The Motley Fool has a position in and recommends Bitcoin. The Motley Fool has a disclosure policy.
The smartest crypto ETF you can buy now for $50 was originally published by The Motley Fool
