Bitcoin's volatility in 2025 prompts interest in ETFs as alternative investment options

From Nasdaq
January 15, 2025 8:00 AM:

The cryptocurrency market in 2025 started with volatility, with Bitcoin fluctuating between $90,000 and $97,000. Speculation arises due to limited Fed interest rate cuts. Investor focus shifts to Fed’s potential rate pause and concerns over Trump’s policies on tariffs and immigration as inauguration nears.

Treasury yields rising have impacted cryptocurrency and equities markets, with the S&P 500 down 0.4% this year. Bitcoin reached an all-time high last month but has since corrected. U.S. spot-Bitcoin ETFs saw net outflows of $1.6 billion, reflecting cautious investor sentiment awaiting policy clarity.

Despite market volatility, MicroStrategy Inc. continues to buy Bitcoin weekly, accumulating $41 billion worth. Asset management firms are integrating crypto into ETFs, with Calamos launching a Bitcoin Structured Alt Protection ETF providing 100% downside protection. Fed Chair Powell likened Bitcoin to gold, and BlackRock’s Bitcoin ETF surpasses its gold ETF in assets.

Investors can consider Bitcoin ETFs like GBTC, IBIT, FBTC, ARKB, and BITB as alternatives to direct Bitcoin investment. ETFs offer benefits such as trading on regulated exchanges, simpler buying/selling processes, and greater tax efficiency. They eliminate risks like wallet hacking and losing private keys associated with direct Bitcoin ownership.

Read more at Nasdaq: Bitcoin’s Shaky Start to 2025: Buy the ETFs on the Dip?