Bitcoin (CRYPTO: BTC) has a moment. After starting 2024 with a bang, the cryptocurrency delivered disappointing performance from March through September. Now Bitcoin is reaching new heights after rising nearly 80% in the past three months.
While the exact mechanics of any run are never fully understood, the recent rise in Bitcoin’s price appears to have been driven – at least in part – by Trump’s election. The new government is considered very crypto-friendly and is expected to take a soft approach in regulating the sector. During his campaign, Trump himself said he planned to make the US the “crypto capital of the planet.”
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How an administration chooses to regulate or not Regulating a market has major consequences. The powerful effect that government actions have on the Bitcoin market became clear early this year when the Securities and Exchange Commission (SEC) approved spot Bitcoin ETFs. The cryptocurrency rose 85% in just six weeks.
So, if you have $2000 that you want to invest in Bitcoin, what is the best way to gain exposure? You can always buy the asset directly, but spot Bitcoin ETFs are a good alternative. Here’s my vote for the smartest option.
Let’s face it: despite its meteoric rise and trillions of dollars in investments, many are still wary of Bitcoin. They see it as an inherently risky asset mired in controversy. Can you blame them? Three years ago, FTX put its name on Miami’s NBA arena and bought the right to do so in a $135 million deal. Just a year later, the stock market imploded in spectacular fashion, losing nearly $9 billion in customer funds.
Now the distinction between a private exchange and Bitcoin itself is important. The integrity of Bitcoin and the Bitcoin network was not compromised in any way. It was simply a case of fraud and mismanagement by a private entity. Yet these types of stories keep many people out of the market. That’s why the approval of spot Bitcoin ETFs is so important. These ETFs carry a stamp of approval from the SEC. They give more traditional-minded investors access to Bitcoin through a regulated security, one that they can trade through a normal brokerage.
Spot Bitcoin ETFs help build trust and signal to investors that the market has matured and is safe. Ultimately, this means that a broader group of investors is willing and able to enter the market.
When they were approved, capital flowed into the market. It only lasted 211 days Blackrock‘s offering to reach $40 billion in assets under management (AUM), setting the record for the fastest rise to that level in ETF history. The previous record was 1,253 days.
There are a lot of spot Bitcoin ETFs out there right now – too many for an exhaustive list. Here you will find the top five by AUM.
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iShares Bitcoin Trust ETF (NASDAQ: IBIT)
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Grayscale Bitcoin Trust ETF
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Fidelity Wise Origin Bitcoin Fund
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ARK 21Shares Bitcoin ETF
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Bitwise Bitcoin ETF Trust
With all the options available, which is the best? If I had to choose, it would be the iShares Bitcoin Trust ETF. The truth is that the differences here are small; these are all solid. However, the iShares ETF is the most liquid of them all. It is managed by Blackrock, one of the world’s most trusted asset management companies, and it is one of the cheapest spot Bitcoin ETFs. Blackrock works closely with Coin base to ensure that it uses the best custody protection available. This all adds up to what, in my opinion, is the best Bitcoin ETF on the market.
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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Bitcoin and Coinbase Global. The Motley Fool has a disclosure policy.
The Smartest Bitcoin ETF to Buy Now with $2,000 was originally published by The Motley Fool
