Before the Market Soars 240%, Here’s the Cryptocurrency ETF Recommended by a Wall Street Analyst
Cryptocurrency gained momentum during the pandemic, with Bitcoin and Ethereum leading the charge alongside Dogecoin and Shiba Inu. The market skyrocketed, increasing 15 times in value from March 2020 to November 2021, reaching around $3 trillion.
However, the situation reversed when the Terra blockchain collapsed. This event led to the bankruptcy of several cryptocurrency lenders and exchanges, triggering a crash that wiped out over $2 trillion in value. Between November 2021 and December 2022, the market plummeted by about 75%, dropping to $790 billion.
Yet, the tide turned once more. In the past year, the cryptocurrency market more than doubled as investors returned to risk assets. Currently standing at $1.9 trillion, Morningstar analyst Michael Miller believes it could grow by 240% to $6.4 trillion by 2032. While forecasts should be approached with caution, this estimate seems feasible.
Despite its past wealth generation, the cryptocurrency market remains small compared to the global stock market ($109 trillion) and the global fixed-income market ($135 trillion). The iShares Bitcoin ETF Trust (NASDAQ: IBIT) is highlighted as a promising long-term investment for risk-tolerant investors.
Wall Street Analyst: Bitcoin currently valued at $1 trillion
Bitcoin is the linchpin of the cryptocurrency market, accounting for 52% of it today. Morningstar’s $6.4 trillion estimate implies substantial upside for Bitcoin. With Bitcoin currently valued at $1 trillion, the potential price appreciation ranges from 160% to 280% by 2032. Investing in a spot Bitcoin ETF can capitalize on this.
The SEC recently approved 11 spot Bitcoin ETFs, which purchase Bitcoin directly, unlike futures ETFs. These products track Bitcoin’s price more accurately, reducing the need for specialized exchanges and blockchain wallets. This convenience could attract more retail and institutional investors, potentially driving Bitcoin’s price higher.
Regarding fees, the iShares Bitcoin Trust, with an expense ratio of 0.25%, stands out among the approved spot Bitcoin ETFs. It is crucial to consider fees, as higher fees can significantly impact returns over time. BlackRock’s iShares Bitcoin Trust is particularly noteworthy due to BlackRock’s status as the largest asset manager globally.
However, investors should remain cautious. Bitcoin has a history of high volatility, and this is unlikely to change. Investing in the iShares Bitcoin Trust could result in significant fluctuations, with the possibility of losing 50% or more of its value at times.
