How do you make money with bitcoin ETF?
Spot ETFs, such as the new spot bitcoin ETFs, allow for shares of the fund to be created or redeemed based on market demand. In this way, a spot bitcoin ETF allows investors to gain exposure to the current price of bitcoin without having to hold the asset itself.
In the case of the Bitcoin ETFs, they provide a traditional and well-regarded investment vehicle to gain exposure to the price of BTC. There is, however, a technical difference between the ETF itself and the asset that it tracks.
The main advantage of investing in Bitcoin ETFs (Exchange-Traded Funds) is that it provides a way for investors to gain exposure to Bitcoin without directly owning the cryptocurrency.
Coinbase has an easy-to-use “buy/sell” button and you can choose which cryptocurrency you want to sell and the amount. You'll quickly exchange cryptocurrency into cash, which you can access from your cash balance in Coinbase. From there, you can transfer the money to your bank account if you wish.
For individual investors, IBIT, FBTC, BITB and ARKB represent the best Bitcoin ETFs choices. I particularly recommend IBIT and FBTC for their higher liquidity and narrow spreads. I believe the IBIT ETF will attract the most interest from institutional investors.
Deciding if a bitcoin ETF makes sense for you
Your financial goals, risk tolerance and time horizon will be key factors in assessing whether it is worth it for you to put money in a bitcoin ETF. Put bluntly, “It's not for the faint of heart,” Armour said.
Having exposure to only bitcoin is the same as owning only one stock, which, as everyone knows, supremely limits your performance potential in the market. There are so many other assets to consider as a part of a balanced, comprehensive digital asset portfolio, and ETFs reduce this potential.
Key Risks to Consider
Extreme Volatility: Bitcoin is notorious for its substantial price fluctuations, making ETFs that track its price inherently high-risk investments.
Yes. A spot bitcoin ETF allows investors to gain exposure to the price of bitcoin without the complications and risks of owning bitcoin directly. Those include setting up crypto wallets and accounts with crypto exchanges, some of which have poor cyber security records and are prone to hacks.
Should they be in your portfolio? Although the approval of these ETFs is a major improvement for this space, they are still speculative assets and, thus, will continue to be volatile. Adding Bitcoin ETFs doesn't change our overall philosophy of holding Bitcoin: it is a speculative asset and should be treated as such.
How much will I get if I put $1 dollar in Bitcoin?
1 USD = 0.000015474 BTC Apr 14, 2024 13:29 UTC
Check the currency rates against all the world currencies here. The currency converter below is easy to use and the currency rates are updated frequently. This is very much needed given the extreme volatility in global currencies lately.
| USD | BTC |
|---|---|
| 20 USD | 0.00031078 BTC |
| 50 USD | 0.00077696 BTC |
| 100 USD | 0.00155391 BTC |
| 200 USD | 0.00310783 BTC |
Most financial experts recommend limiting crypto exposure to less than 5% of your total portfolio. Crypto is considered a high-risk asset class. Limiting allocation helps manage overall volatility and risk. Those new to crypto investing may start with 1% to 2% as an introduction.
| ETF | Assets Under Management | Expense Ratio |
|---|---|---|
| Vanguard Information Technology ETF (VGT) | $70 billion | 0.10% |
| VanEck Semiconductor ETF (SMH) | $16.3 billion | 0.35% |
| Invesco S&P MidCap Momentum ETF (XMMO) | $1.6 billion | 0.34% |
| SPDR S&P Homebuilders ETF (XHB) | $1.8 billion | 0.35% |
Futures ETFs do not hold actual bitcoin. Instead, they use bitcoin futures contracts to gain exposure to the cryptocurrency. A bitcoin futures contract allows investors to speculate and bet on the future price of the asset.
| ETF name & symbol | Fee |
|---|---|
| Bitwise Bitcoin ETF (BITB) | 0.20% |
| VanEck Bitcoin Trust (HODL) | 0.20% |
| Ark 21Shares Bitcoin ETF (ARKB) | 0.21% |
| iShares Bitcoin Trust (IBIT) | 0.25% |
How ETFs can potentially help generate income. Most ETF income is generated by the fund's underlying holdings. Typically, that means dividends from stocks or interest (coupons) from bonds.
For most individual investors, ETFs represent an ideal type of asset with which to build a diversified portfolio. In addition, ETFs tend to have much lower expense ratios compared to actively managed funds, can be more tax-efficient, and offer the option to immediately reinvest dividends.
Like many of the new spot bitcoin ETFs, the iShares Bitcoin Trust uses a fee waiver to lower the initial cost of investing and attract more investors. For the first 12 months of trading or the first $5 billion in fund assets (whichever comes first), the annual fee will be just 0.12%.
This regulated investment vehicle is designed to make it easier for traditional investors to gain exposure to bitcoin's price movements without having to securely buy and store the digital currency, alleviating the technological hurdles of investing in crypto.
What makes more money stocks or Bitcoin?
A broadly diversified stock portfolio generally presents a safer option than cryptocurrencies because of their intrinsic value and history of delivering solid long-term returns. Cryptocurrencies may hold greater potential for outsized gains, but come with significant risk.
Bitcoin ETF Price Summaries
Bitcoin ETF's price today is US$0.001725, with a 24-hour trading volume of $6,431.
The IRS treats cryptocurrencies as property for tax purposes, which means: You pay taxes on cryptocurrency if you sell or use your crypto in a transaction, and it is worth more than it was when you purchased it. This is because you trigger capital gains or losses if its market value has changed.
Bitcoin ETFs follow the traditional rules for capital gains and losses. First, short-term capital gains and losses (including carryovers) are netted. Next, long-term capital gains and losses (including carryovers) are netted. Finally, the net short-term gain or loss is combined with the net long-term gain or loss.
While the new spot bitcoin ETFs are designed to track the bitcoin price directly, they do not impact it in the same way. Buying a share of an ETF has no real-time impact on bitcoin's price through direct means. In fact, the bitcoin represented by the share is not even purchased until the next trading day.
