It appears the Wild West days of bitcoin and crypto are over. Many are simply looking at BTC as a portfolio staple – something they need to have if they want to possess necessary diversification.
Bitcoin Is Making Its Way Into More Portfolios
According to Dan Egan of Betterment fame, the currency remains volatile. We’ve seen another example of that just this week. The currency started this period off at under $40,000 per unit. Now, the currency has risen beyond $43,000. He said in an interview that while this volatility tends to thrive, many are becoming used to bitcoin’s erratic behavior, and are simply viewing it as another stock option that allows them to keep their portfolios strong as the world of assets changes.
It’s definitely maturing into more of an alternative like gold or precious metals. You should have a little slice of it in your portfolio just for diversification’s sake.
This is a massive change from the attitude so many people seemed to have when it came to crypto just a few years ago. It appeared that bitcoin was the most speculative asset out there, and anyone who owned it was either on a path towards financial ruin or great wealth. It could go either way. Bitcoin was an asset that was best described as “risky.”
But following the introduction of the coronavirus to the global economy, bitcoin has seemingly taken on more of a hedge position. People see it as something that can keep their wealth stable and steady during times of economic strife, especially now given that inflation is so high due to the excessive printing of fiat currencies such as the U.S. dollar.
Bitcoin initially rose to about $68,000 per unit in the middle of November 2021. Things were looking great, and it appeared that the asset was on top of the world. However, from there began a series of dips that by January of this year, saw bitcoin trading for less than half that price for a short period.
Things are improving now, and Simeon Hyman of Pro Shares – which saw a bitcoin futures-based ETF released in late 2021 – believes that the world of crypto is introducing all kinds of new products that should satisfy both long and short-term traders. He said in a statement:
The futures market, if anything, is a better reflection of price and more liquid. BITO, in and of itself, trades lots of volume every day, and there are options on it as well.
ETFs Are Becoming Bigger
Discussing last week’s rejection of the Fidelity application for a bitcoin ETF by the SEC, he said:
The futures market [has] multiple exchanges that converge to the price of those futures. There are key advantages when you combine that with the ETF structure that make it a pretty compelling value proposition.