Bitcoin (CRYPTO:BTC) is having a moment. After starting 2024 with a bang, the cryptocurrency recorded disappointing performance from March to September. Today, Bitcoin is hitting new highs after surging nearly 80% over the past three months.
While the exact mechanics of any run are never entirely clear, the recent rise in Bitcoin's price appears driven – at least in part – by Trump's election. The new administration is considered very pro-crypto and is expected to take a soft approach in regulating the sector. During the election campaign, Trump himself stated that he intended to make the United States the “crypto capital of the planet.”
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How an administration chooses to regulate or not regulating a market has big implications. The significant impact of government actions on the Bitcoin market was clearly demonstrated earlier this year when the Securities and Exchange Commission (SEC) approved spot Bitcoin ETFs. The cryptocurrency is up 85% in just six weeks.
So if you want to invest $2,000 in Bitcoin, what's the best way to get exposure? You can always buy the asset directly, but spot Bitcoin ETFs are a great alternative. Here's my vote for the smartest option.
Let's be realistic: despite its meteoric rise and its trillions of dollars of investment, many people are still wary of Bitcoin. They see it as an asset that is inherently risky and mired in controversy. Can you blame them? Three years ago, FTX put its name on Miami's NBA arena, purchasing the right to do so in a $135 million deal. Just a year later, the stock market imploded spectacularly, resulting in the loss of nearly $9 billion in customer assets.
Now, the distinction between a private exchange and Bitcoin itself is important. The integrity of Bitcoin and The Bitcoin network has not been compromised in any way. This was simply a case of fraud and mismanagement by a private entity. Still, stories like this keep many people away from the market. This is why the approval of spot Bitcoin ETFs is so important. These ETFs carry with them the SEC's seal of approval. They give more traditional investors access to Bitcoin through a regulated security, which they can trade through a normal brokerage.
Spot Bitcoin ETFs help build trust, signaling to investors that the market is mature and safe. Ultimately, this means more investors are willing and able to enter the market.
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