What Lies Ahead of Bitcoin ETFs: Pain or Gain?
Werte in diesem Artikel
Bitcoin has been registering price volatility following an executive order by President Donald Trump to establish a strategic Bitcoin reserve for the United States. The reserve will be funded using Bitcoin seized in criminal and civil forfeiture cases, with no plans for the U.S. government to purchase additional Bitcoin at this time.Market ReactionBitcoin, which has skyrocketed since Trump’s election win on hopes of a reserve, found the actual government move underwhelming. Following the announcement last Thursday, crypto prices declined, as investors were disappointed that the government did not introduce a more aggressive Bitcoin acquisition program. Other major cryptocurrencies experienced losses post the news.Bitcoin has lost about 9% in price over the past week (at the time of writing), but bounced back on Monday. At the time of writing Bitcoin gained more than 2% on Monday.Long-Term Bullish Outlook?Despite the market’s negative reaction, some investors believe the move is bullish in the long term. Matt Hougan, CIO at Bitwise Asset Management, told CNBC’s Squawk Box Asia that the market may be misinterpreting the announcement. The market is short-term disappointed that the government didn’t say it was immediately going to acquire 100,000 or 200,000 Bitcoin, per Hougan.Potential Future AccumulationWhite House Crypto and AI Czar David Sacks hinted at possible future Bitcoin acquisitions, stating that the U.S. government would explore budget-neutral strategies that impose no extra costs on taxpayers. However, any additional purchases beyond seized assets would require further executive or legislative action.Bitcoin’s Geopolitical SignificanceHougan believes this move strengthens Bitcoin’s position as a geopolitically important asset, increasing the likelihood that other governments will establish their own strategic Bitcoin reserves. And the move takes place in reality, Bitcoin’s future price could be $1 million instead of $80,000, per Hougan, as quoted on CNBC.Short-Term Setback or Long-Term Opportunity?Hougan described the recent price drop as a temporary setback, predicting that the market will soon recognize the long-term bullish implications of the U.S. strategic reserve. But we believe that investors should remain cautious about investing in Bitcoin, as we have yet to gain more clarity on the Bitcoin acquisition plan.Moreover, trade tensions persist, and it remains to be seen which direction Trump’s tariff war will ultimately take. At the time of writing, Bitcoin is down 11.8% so far this year. We suggest that investors remain on the sidelines.Safe Bitcoin ETFs for Risk Averse InvestorsIssuers have introduced various tools to make a high-risk asset like Bitcoin more accessible and appealing to risk-averse investors. Calamos, has launched a suite of Bitcoin buffer ETFs: Bitcoin Structured Alt Protection ETF – January CBOJ, Bitcoin 90 Series Structured Alt Protection ETF – January CBXJ and Bitcoin 80 Series Structured Alt Protection ETF – January CBTJ.Innovator also launched the Uncapped Bitcoin 20 Floor ETF - Quarterly QBF, the first ETF offering uncapped exposure to Bitcoin’s upside potential while simultaneously capping downside losses. These products some downside protection amid extreme volatility.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks
Quelle: Zacks