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Gold rush is over for bitcoin but it’s portfolio value, Betterment says


It’s been another wild week for bitcoin.

The cryptocurrency rallied 11% on Friday, bringing it back above $40,000 for the first time in two weeks. A few days earlier, it dipped below $37,000.

But while bitcoin remains volatile, Dan Egan of Betterment said it is turning into a portfolio staple.

For example, in the early days of bitcoin, it was seen as an abrupt path to wealth – now it acts more like a “digital gold asset” that can provide a hedge market, he told CNBC “ETF Edge“in Monday.

“It is definitely slowly becoming an alternative like gold or precious metals,” Egan said. “You should have a small portion of it in your portfolio just for the sake of diversification.”

However, the bitcoin price is still far above the highs set in November. The cryptocurrency was trading at close to $70,000 at its peak.

Alternative exposure to bitcoin can be found in the ETF space. The bitcoin price skyrocketed last year following the launch of the first bitcoin futures ETF, ProShares Bitcoin Strategy ETF (BITO)in October.

This ETF futures is useful for both long-term and short-term investors, Simeon Hyman of ProShares said in the same “ETF Edge” interview.

“The futures market, if at all, is a better reflection of prices and higher liquidity,” he said. “BITO itself trades a lot of volume every day and has options on it too.”

Last week, the US Securities and Exchange Commission rejected Fidelity’s bitcoin ETF application, but BITO kept its promise, Hyman added.

“Future Market” [has] Many exchanges converge on the prices of those futures contracts.

The BITO ETF is up 5% this month, even though it’s down 12% for the year.

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