Bitcoin had a pretty big week recently, with new crypto exchange-traded funds hitting the scene. Ric Edelman, who’s an investor and bestselling personal finance author, thinks this is great news for investors. He’s all about these buffer ETFs and yield ETFs, finding them super exciting. According to Edelman, these new bitcoin ETFs can protect you from the downsides of volatile markets while still allowing you to enjoy the profits. And the best part? You can make some serious cash with yields, way more than what the stock market can offer.
Edelman isn’t just any regular finance guy – he’s the founder of the Digital Assets Council of Financial Professionals, where he teaches financial advisors all about cryptocurrencies. Plus, he’s in Barron’s Financial Advisor Hall of Fame, so you know he’s legit. According to Edelman, crypto is a long-term investment, just like stocks. It’s all about diversifying your portfolio and playing the long game.
As bitcoin started its rally, hitting over $100,000 for the first time since February, Edelman’s thoughts couldn’t be more timely. By the end of the week, bitcoin was up by 6%, and it’s already seen a 10% increase this month. However, Edelman isn’t a fan of leverage and inverse bitcoin ETFs. He’s worried that retail investors might not fully understand how these ETFs work and the risks involved. Not all crypto ETFs are suitable for everyone, according to Edelman.
In an interview on “ETF Edge,” Edelman pointed out the issues with leveraged ETFs that reset daily, comparing them to buying a lottery ticket. He doesn’t consider this type of trading as investing, and he’s not the only one with concerns. Host Bob Pisani mentioned the 2x Bitcoin Strategy ETF (BITX) as an example of a leveraged bitcoin product with daily fees and resets. While the ETF saw a 12% jump this week and a 19% increase this month, it’s still underperforming compared to bitcoin’s 10% rise this year.
Volatility Shares, the company behind BITX, warns investors on its website that the Fund may not be suitable for everyone. There’s a possibility of losing the entire investment in a single day, which is definitely not ideal for the faint of heart.
With all the buzz around bitcoin and these new ETFs, it’s easy to get caught up in the excitement. But it’s essential to understand the risks involved and do your homework before diving in. Not every investment opportunity is a sure thing, and it’s crucial to be aware of what you’re getting into.
