Some financial experts on Wall Street believe that the price of Bitcoin may go up a lot in the next few years, and investors can easily invest in this digital currency through a spot Bitcoin ETF.
The total value of the cryptocurrency market is $1.6 trillion, and half of that value comes from Bitcoin (BTC), which is currently at a 50% share. Five years ago, Bitcoin’s share was also 50%, but it has fluctuated between 38% and 70% since then.
Keeping that in mind, cryptocurrency expert Michael Miller predicts that the overall value of the cryptocurrency market will increase by 300% to reach $6.4 trillion by 2032. If Bitcoin continues to be 50% of the market, its growth potential is also around 300%.
However, if Bitcoin’s dominance drops to 38%, the potential growth decreases to about 200%, and if Bitcoin’s dominance rises to 70%, the potential growth increases to approximately 460%.
Still, people who believe in cryptocurrency have good reasons to put their money into Bitcoin, and there are a few ways to do it. The easiest way is to use a cryptocurrency exchange like Coinbase (NASDAQ: COIN). However setting up and handling an account might be a hassle, especially for investors who already have brokerage accounts.
Bitcoin ETFs make it easier for investors to buy and sell Bitcoin
Earlier this month, the U.S. Securities and Exchange Commission (SEC) gave the green light to 11 Bitcoin ETFs. These are funds that follow the price of Bitcoin. This significant decision might attract more regular people and big investment companies to join the market.
As a result, the increasing amount of money coming in could push the price of Bitcoin even higher in the coming years.
Spot Bitcoin ETFs are great because they make it easy for investors. You don’t have to deal with different accounts or use a special exchange to buy Bitcoin. You also don’t have to worry about storing Bitcoin in a blockchain wallet.
With spot Bitcoin ETFs, you can simply add Bitcoin to your regular brokerage account. This ease of use might increase the value of Bitcoin.
Some experts think the price of Bitcoin could go up a lot in the future. One group of analysts predicts it could reach $150,000, which is a 252% increase from its current price of $42,600.
Another group from Standard Chartered Bank believes it could even go up to $200,000, representing a 369% increase by 2025.
The top and bottom places for Bitcoin ETFs
Most spot Bitcoin ETFs work similarly. They buy Bitcoin from a cryptocurrency exchange, like Coinbase, break it into shares, and then sell those shares on the stock market. In simple terms, it’s not a situation where a skilled team of asset managers can significantly increase the value of the fund by trading securities at opportune moments.
So, if you’re a long-term investor, it’s important to pay attention to fees when considering buying and holding investments. The SEC has given the green light to 11 Bitcoin ETFs, but it’s worth noting that different funds have different fees, as explained later on.
- Bitwise Bitcoin ETF Trust (BITB) has a fee of 0.20%.
- Ark 21Shares Bitcoin ETF (ARKB) charges a fee of 0.21%.
- Fidelity Wise Origin Bitcoin Fund (FBTC) has a fee of 0.25%.
- iShares Bitcoin Trust (IBIT) has a fee of 0.25%.
- Valkyrie Bitcoin Fund (BRRR) charges a fee of 0.25%.
- VanEck Bitcoin Trust (HODL) has a fee of 0.25%.
- Franklin Templeton Digital Trust (EZBC) has a fee of 0.29%.
- WisdomTree Bitcoin Trust (BTCW) charges a fee of 0.3%.
- Invesco Galaxy Bitcoin ETF (BTCO) has a fee of 0.39%.
- Hashdex Bitcoin ETF (DEFI) charges a higher fee of 0.94%.
- Grayscale Bitcoin Trust (GBTC) has the highest fee among these, at 1.5%.
I would get rid of the lower part of that list just because of the fees, especially the Grayscale Bitcoin Trust. Paying 1.5% for an ETF doesn’t make sense. That means investors would spend $15 each year for every $1,000 invested. You can buy the same thing for way less money.
Next, I’d think about the company that manages the ETF. Some of the funds mentioned earlier are handled by experienced asset managers like Ark Invest and Fidelity. However, I prefer the iShares Bitcoin Trust because it’s managed by BlackRock, the biggest asset manager globally.
The company that issues the ETF (Exchange-Traded Fund) doesn’t matter much, but ETFs managed by bigger financial firms might be less likely to face issues if not enough people want to buy or sell them.
For example, on January 18, the iShares Bitcoin Trust was priced 0.08% higher than the actual value of its assets, showing that many investors want it. On the other hand, the Grayscale Bitcoin Trust was traded at a 0.27% lower value than its assets, indicating lower demand.
I suggest avoiding Bitcoin ETFs that charge more than 0.25%. Also, stay away from the Grayscale Bitcoin Trust because there are cheaper options available. Instead, consider buying Bitcoin ETFs from Ark, BlackRock, and Fidelity. My top recommendation would be the iShares Bitcoin Trust.
