Cryptocurrency bears, we hardly knew ye.
After two years of thinking Bitcoin (CRYPTO: BTC) was going to be dead and buried, the price of Bitcoin surged over US$50,000 this week. This marked the highest level in over two years. The cryptocurrency hit its highest level at US$50,334 on Monday, the highest level since December 2021.
But should you buy now? In short, nah. Instead, there is another investment option to consider instead.
What happened
First off, let’s certainly state that the US$50,000 mark is a significant milestone for Bitcoin. The price has risen steadily over the last while, up 17% year to date as of writing. This has continued to put it at the top spot among cryptocurrencies, and that spot could only grow stronger.
That being said, the coin is still far below all-time highs. And those that thought it would reach US$100,000 were sadly mistaken back in 2021. Even so, spot-market demand will likely continue to see a spike in trading volume. And this comes down to one thing – exchange-traded funds (ETF).
Why ETFs
The key is that the introduction of ETFs with a focus on cryptocurrency has seen a large inflow of investments. And as the price only climbs higher, every type of investor has the opportunity to get in on the climbing spot price. Net inflows to spot-Bitcoin ETFs reached US$1.1 billion over the past week, and US$2.8 billion since the launch of these ETFs.
And it’s not just Bitcoin. Other ETFs and cryptocurrencies have seen their prices climb in response to the rise in Bitcoin. What’s more, there continues to be a relaxing monetary policy in China. This has further led to more asset purchases, especially in Bitcoin and other cryptocurrencies, including ETFs.
Yet, here’s the thing. These ETFs are only new in the United States. Here in Canada, they’ve been on the market a lot longer. So before you go loading up on some of those new ETFs, there are far safer and more stable and diversified options to consider here at home.
1 ETF to consider
If you want exposure to Bitcoin, then there are certainly ETFs that focus solely on the cryptocurrency. However, if you’re a bit more worried about the spot price of Bitcoin and other cryptos, I would understand that as well. Which is why it might be a good idea to not only get into crypto, but also investments supporting the crypto market’s growth.
If you’re looking at investing in cryptocurrency and all that supports it, I would consider investing in the ETF Horizons Big Data & Hardware Index ETF (TSX: HBGD). This ETF invests in blockchain companies, mining companies, data centres, and more.
Shares of the ETF are up 56% over the last year, though down 13% year to date. However, should we continue to see momentum in the cryptocurrency space, this could turn around in the near future. So sure, cryptocurrency is great, but it’s still risky as well. Therefore, getting into these companies that support the overall crypto market’s growth may certainly offer more opportunity. And a lot more stability than Bitcoin.
