The crypto market is once again on the cusp of significant growth, particularly Bitcoin (BTC), the world’s oldest and most valuable cryptocurrency.
With Bitcoin trading at approximately $65,000 per coin, many investors are eagerly anticipating a major surge in price.
However, for the average investor, buying an entire Bitcoin may seem out of reach due to its high cost.
Fortunately, there’s an alternative way to gain exposure to Bitcoin without spending a fortune: the iShares Bitcoin Trust ETF (IBIT), currently trading at a more accessible $37 per share. But is it a good investment?
Let’s explore.
The Rise of Bitcoin ETFs
Bitcoin exchange-traded funds (ETFs) have become a popular way for investors to gain exposure to cryptocurrency without directly owning the digital assets.
The iShares Bitcoin Trust ETF is one of the most notable options in this space, offering investors a simplified and cost-effective way to participate in the growth of Bitcoin.
The ETF is directly tied to the price movements of Bitcoin, meaning that its value fluctuates in sync with the cryptocurrency.
But what sets the iShares Bitcoin Trust ETF apart is its accessibility and regulatory protections.
At $37 per share, it offers a much more affordable entry point than buying even a fraction of a Bitcoin.
Moreover, ETFs like this one are traded through traditional brokerage accounts, offering a familiar and straightforward investing experience for those already comfortable with stocks and other traditional assets.
Benefits of Bitcoin ETFs
One of the most significant advantages of investing in a Bitcoin ETF like iShares is its simplicity.
Unlike buying Bitcoin directly, which involves creating a cryptocurrency wallet and safeguarding security keys, purchasing shares of the ETF is as easy as buying any stock or mutual fund.
You can hold the ETF in your regular brokerage account, and it’s subject to the same regulatory standards as other exchange-traded funds.
The ETF structure also brings several layers of security that aren’t typically available when purchasing cryptocurrencies through a crypto exchange.
The iShares Bitcoin Trust ETF is managed by BlackRock, one of the world’s largest asset managers, with actual Bitcoin trades executed by Coinbase Prime.
These institutional players offer additional peace of mind, providing insurance coverage and expertise to safeguard your investment.
In addition, holding a Bitcoin ETF helps investors avoid the risks associated with security breaches, hacking, and lost passwords—issues that have plagued the cryptocurrency market since its inception.
With BlackRock and Coinbase at the helm, investors are shielded from many of the risks that can come with direct ownership of Bitcoin.
Low Price, Big Potential
Another compelling reason to consider the iShares Bitcoin Trust ETF is its current low price.
At under $40 per share, the ETF offers a “Goldilocks” pricing range that’s neither too high nor too low.
While you could technically buy one hundred-millionth of a Bitcoin on a cryptocurrency exchange, doing so may feel cumbersome compared to the convenience of purchasing ETF shares at a reasonable price point.
Importantly, if Bitcoin’s price experiences the type of dramatic growth some analysts expect, iShares could choose to split its ETF shares, making it easier for retail investors to continue participating in the market.
For instance, if Bitcoin reaches $1,000,000 per coin as some bullish investors predict, the iShares ETF could rise to around $570 per share.
A simple 10-for-1 split would bring the ETF’s price back down to around $57, ensuring it remains an accessible investment for everyday traders.
The $40 Threshold: What It Means
Currently priced around $37 per share, the iShares Bitcoin Trust ETF would reach $40 when Bitcoin itself is priced around $70,100 per coin.
This modest increase represents a roughly 7% gain from today’s levels, which is a reasonable expectation given the crypto market’s potential.
The real draw of a Bitcoin ETF is that it offers a lower-priced method to invest in Bitcoin without the high volatility that comes with owning the underlying asset.
As long as Bitcoin’s long-term pricing trend is upward, investors can benefit from the price direction without being overly concerned about the day-to-day fluctuations.
Looking ahead, the availability of Bitcoin ETFs like iShares could contribute to further price increases, especially in the wake of Bitcoin’s recent halving event.
Historically, Bitcoin’s halving events, which reduce the reward miners receive for processing transactions, have led to substantial price increases over the following year or two.
While nothing is guaranteed in the volatile world of crypto, it’s not far-fetched to think that the iShares ETF could rise to $60 or even $80 by 2025, in tandem with Bitcoin prices climbing to $100,000 or more.
Should You Invest in the iShares Bitcoin Trust ETF?
Given the potential for significant price growth, the iShares Bitcoin Trust ETF could be an attractive addition to your portfolio, especially if you’re interested in gaining exposure to Bitcoin but want to avoid the complexities of directly buying and storing the digital currency.
The ETF structure offers multiple layers of security, regulatory oversight, and an affordable entry point.
For long-term investors who believe in the future of Bitcoin, the iShares Bitcoin Trust ETF provides a manageable way to participate in the market without taking on the risks of direct cryptocurrency ownership.
While the price of Bitcoin and, by extension, the ETF, is highly volatile, the long-term trend for Bitcoin has historically been upward.
And with a current price of under $40 per share, now may be an opportune time to invest.