Bitcoin Has Risen Above $60K, Does It Deserve a Place In Your Portfolio?

(CTN News) – Bitcoin surpassed $60,000 this week for the first time since November 2021. Digital currency demand surged so much on Wednesday that Coinbase crashed.

A new bitcoin spot ETF or exchange-traded fund could soon shatter bitcoin’s previous records after the brutal crypto winter of 2022.

Additionally, ether, the native token of the Ethereum network, surged past $3,300 as investors speculated that ethereum ETFs would eventually be approved by the SEC as well.

Bitcoin ETFs are attracting billions of dollars every day, but is it time for you to join in? Take caution when proceeding.

Why are bitcoin ETFs so popular?

According to Pew Research Center research, 75% of Americans who have heard of cryptocurrency don’t trust its safety or reliability.

Late in 2023, the price of bitcoin began to climb again after a federal appeals court ruled that the SEC misjudged Grayscale Investments’ application to convert its Grayscale Trust into a spot ETF. A court decision by the SEC was not appealed by the agency in October.

Nearly a dozen new bitcoin exchange-traded funds were approved in January. Gold, silver, spot ETFs closely track their underlying asset’s price, minus trading costs.

“This is the first ETF of its kind,” said Ric Edelman, founder of the Digital Assets Council of Financial Professionals. There are ETFs that invest in stocks of companies that do business in the crypto industry, such as exchanges and miners, and there are ETFs that trade futures in bitcoin, which is like buying equity options instead of stocks, but so far there hasn’t been a ETF that directly invests in it.”

With the SEC’s decision, investors can get direct exposure to without having to go through a crypto exchange or worry about storage or security. Bitcoin can also be acquired through individual retirement accounts (IRAs) and brokerage accounts.

Since the ETFs are regulated by the SEC, Edelman said, they are the safest from a custody perspective.

Is bitcoin a good investment?

It’s understandable if you’re tempted to buy with all the hype surrounding it. Before you try to profit from the skyrocketing price, there are several things you should know.

The asset remains speculative

Bitcoin and other cryptocurrencies are speculative investments, meaning people buy them with the hope that the price will rise rapidly. Since they don’t generate any income, speculative assets are sometimes called nonproductive assets. Short-term price fluctuations are typically the goal of investors who buy speculative assets.

“A financial asset is typically seen as capital provided to a company,” said Michael Finke, a professor of wealth management at The American College of Financial Services. The company uses the capital to make something, and then the people buy it. The profits are what value the company.

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