By Brian Spinelli, CFP®, AIF®, Co-Chief Investment Officer as featured in Kiplinger
As bitcoin’s price rises, first-time bitcoin investors in the US face a quandary — buy now or wait a month to see if a spot bitcoin ETF gets approved first?
If an approval of a spot Bitcoin exchange-traded fund (ETF) in the US is going to happen, it’s going to happen soon.
ETF research analysts are expecting any potential approval orders to come between Jan. 8 and Jan. 10 next year but as Bitcoin’s price surges — rising above $40,000 for the first time since April 2022— retail investors who are looking to hodl for the first time are in a tough spot — buy now or wait a month to see if they will get access to a spot ETF?
“I would want to know the personal reasons for waiting for an ETF,” said Brian Spinelli, co-chief investment officer at wealth advisory firm Halbert Hargrove, which oversees around $2.7 billion in assets, in an email. “If the answer is it makes it accessible and easier for them to do it then I understand the waiting.”
Currently the most common way to buy Bitcoin in the US is through crypto exchanges where investors have the option either to let the exchange custody their purchased Bitcoin, which is viewed as less secure, or choosing to self-custody via a crypto wallet, which is more secure but requires a higher level of crypto knowledge.
An ETF sits somewhere in between those two options as it’s an investment vehicle that allows investors to gain direct exposure to Bitcoin through trusted investment firms without the hassle of dealing with a crypto wallet. ETFs, more broadly, are popular investment vehicles due to their low fees and accessibility since they can be held in brokerage accounts and traded intraday on the stock market.
“These are tried and true firms that many people trust for their brokerage accounts and other financial needs,” said James Seyffart, a Bloomberg ETF analyst, via email. “This is going to bring Bitcoin onto the traditional financial rails in the most efficient way possible in our view, which arguably goes against some of the ethos for Bitcoin.”
