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I'm a huge believer that cryptocurrencies - especially Bitcoin - belong in every investor's portfolio right now.
I haven't been the least bit surprised by Bitcoin's all-out 12-month run from $8,600 all the way up to $34,000, or Ethereum's jump from $166 to more than $1,350 - those are just two household names.
Lately, I've heard from lots of traders with a bad case of crypto "FOMO fever." I just tell them to go and check out my one-year and 10-year predictions. It's still not too late.
Even so, I've talked to plenty of traders who, for whatever reason, are still nervous about jumping into Bitcoin with both feet.
I'd tell them what I tell everyone about cryptocurrencies...
How to Profit from Bitcoin (Even Without the Bitcoin)
I understand the "Bitcoin jitters." Its value as a private, decentralized digital asset is well known. But, yeah, it's also very volatile, swinging from a Jan. 8 high of more than $42,000 to a low of $34,000, back to $39,000 to settle at just under $34,000.
(It's likely consolidating for a move higher, by the way.)
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I think, ultimately, we'll see those highs and lows get higher, though. We've already seen how more and more institutions are moving into Bitcoin, which will go a long way toward smoothing out the price action. In fact, just a few days ago, the fund I'm thinking of bought nearly 16,250 bitcoins for nearly $600 million - that's just a fraction of the institutional interest here. More about that in a second.
But, if you're still reluctant, I always recommend a Bitcoin investment you can buy and sell from the "comfort" of your own brokerage account. I'll bet you'll get comfortable with the profits.
In fact, even if you do have substantial Bitcoin holdings, I'd still recommend these shares so you can make the absolute most out of them - like the cherry on top.
I'm talking about the Grayscale Investments' Grayscale Bitcoin Trust ETF (OTC: GBTC). It's an exchange-traded fund you can buy and sell just like you would any regular stock that closely tracks the price of Bitcoin... at around 1/1,000th of the price.
As of this writing, GBTC was trading at just under $35.50 a share. Like I said, it's perfect for folks who are curious about Bitcoin, or are feeling a little shy about diving in. You get a great feel for how Bitcoin behaves, and how, when it's time to take the plunge, how you might want to fit it into your portfolio
The Bitcoin Trust is one of Grayscale's most popular products. Grayscale itself had a dynamite fourth quarter of 2020, and, judging by the first few weeks of 2021, this year could be even better. CEO Michael Sonnenshein tweeted last week that, on Jan. 15, the firm raised more than $700 million in a day - on top of the $3.3 billion its crypto vehicles raised in Q4 2020. The Bitcoin Trust ETF raised an average of $217 million a week.
GBTC is making big moves. As I mentioned, just this past Monday and Tuesday, GBTC management scooped up nearly 16,250 bitcoins - a huge vote of confidence in Bitcoin's future. GBTC has a total Bitcoin "war chest" of around 630,000, worth around $23 billion. The company also has holdings in Bitcoin Cash, Litecoin, and Ethereum - all great digital assets I talk about frequently with my Microcurrency Traderreaders. (You can learn how to get that research here.)
In its Q4 report, Grayscale really echoed what I've been saying for months now about the importance of institutional money to Bitcoin; management said institutional investments made up around 93% of capital inflows in that quarter. That's $3 billion.
I'll be watching this company and this ETF closely. This is important to note: At the moment, GBTC isn't actually option-able; you can't trade options on it yet. But I'm checking in frequently to see whether that will change. The most important thing to bear in mind, however, is that this makes both a great starting point for Bitcoin and a nice, lucrative addition to crypto holdings; it's basically the best of both worlds.
About the Author
Tom Gentile, options trading specialist for Money Map Press, is widely known as America's No. 1 Pattern Trader thanks to his nearly 30 years of experience spotting lucrative patterns in options trading. Tom has taught over 300,000 traders his option trading secrets in a variety of settings, including seminars and workshops. He's also a bestselling author of eight books and training courses.