Over the years crypto assets have gained tremendous popularity as a niche asset class. Despite extremely high volatility, cryptos have the potential to deliver huge returns.
There are various products in the market for investors that can help them participate in new-age assets and reduce volatility.
An exchange-traded fund (ETF) is a product that tracks a particular index, sector, stock, commodity or any other asset to bring you the best of both worlds.
The Bitcoin ETF was introduced in October 2021 and attracted a large section of investors who did not want the hassle of holding the token in hot or cold wallets.
The Bitcoin ETF is actively traded on the New York Stock Exchange Accra network. Investors can buy BITO shares through a brokerage or directly from ProShares. BITO is the largest actively managed Bitcoin ETF to date.
Why Bitcoin ETFs? It is a passive form of investment, where investors mostly do not have to worry about short-term fluctuations and invest their money in a particular asset for a long period of time. Even during times of volatility, they try to make the most of it by averaging their costs.
Mohamed Roshan, CEO and co-founder of GoSats, said that passive crypto investing is a great idea, and a great way to achieve one’s financial goals, but only if investors stick to strong names that have shown their credibility and credibility. Proven value.
Gaurav Dahake, CEO and Founder of BitBans, said that Bitcoin ETFs are a stress-free form of investing as they allow them to stay invested for an extended period of time and get the most out of their investments.
Who should choose it? Market experts suggest that new and novice investors, who have a low risk appetite and who do not want cryptocurrencies directly or cannot track the markets often, should enter the crypto space through bitcoin ETFs.
“ETFs are a great way for institutions and corporations to invest in bitcoin, while the regulation surrounding crypto is still unclear,” Roshan said.
Furthermore, Dahke believes that an investor who is not concerned about short-term market sentiment, or who is looking for portfolio diversification in a high-return asset class in the long run, should consider buying bitcoin directly instead. can see.
Time horizon and outlook? Crypto investments are long term and require thorough and thorough research. Short-term investing can lead to disappointment and loss of rewards.
An investor going into a crypto ETF should choose a prominent and legitimate one based on its market capitalization and understand the overall purpose of the token for which it was developed, advises Dahake of BitBans.
borders The actual crypto market is a 24×7 event lasting 365 days but ETFs may have restrictions on trading hours. In addition, ETFs, being less risky than real crypto, can have a higher free structure. ETFs are available for select tokens only.
Bitcoin ETFs on stock exchanges are only open during market hours, as Roshan of GoSat pointed out. “Bitcoin is at a very early stage and is not suitable for investors who plan to exit on a knee-jerk reaction.”
(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent the views of The Economic Times)
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