Should You Invest in Bitcoin Now? Insights from Industry Specialists

Over recent months, sentiment has taken a positive turn. The possibility of the SEC green-lighting fund companies’ longstanding petitions to introduce a spot bitcoin ETF to the market bolstered confidence among cryptocurrency investors, sparking expectations of increased demand for the flagship digital currency.

The breakthrough came on January 10, when it was revealed that 11 new bitcoin ETFs were hitting the market, galvanizing investors who celebrated a triumphant upward push in bitcoin’s value, a whopping 155% boost for the year 2023.

What comes next? Are we witnessing the dawn of another cryptocurrency bull run, or could bitcoin aficionados be celebrating prematurely?

“This is certainly a pivotal moment,” observes Brian Vendig, who helms MJP Wealth Advisors in Westport, Connecticut.

He and his fellow professionals weigh in on future expectations from this juncture.

The advent of new bitcoin ETFs dramatically simplifies the process for mainstream investors to venture into cryptocurrencies. This negates the need for separate crypto accounts and the high costs of trading therein, allowing investors to manage bitcoin alongside their conventional portfolio through their regular brokerage accounts.

“It’s a significant leap forward that’s poised to release a wave of pent-up demand due to the savings for retail buyers and institutional-level security,” articulates Matthew Sigel, head of digital assets research at investment firm VanEck, which manages one of the newly launched funds.

Sigel goes on to anticipate that financial advisors and sizeable institutional investors will soon begin to include crypto offerings in portfolio allocations. He notes that such integration into discretionary client portfolios is imminent, with many banks and brokerages already positioning for adaptation later in the year.

In the foreseeable future, we can expect an expansion of crypto ETFs, including diverse variants.

“The trajectory suggests the eventual creation of ether-based ETFs, introducing another prominent crypto investment channel,” predicts Todd Rosenbluth, head of research at VettaFI. He envisions an opening for a wide array of ETFs that integrate bitcoin with other assets, potentially even combining bitcoin with core holdings like the S&P 500, or as part of complex hedge strategies against other portfolio elements.

To crypto veterans, bitcoin’s latest price surge might seem modest compared to historic market upheavals, suggests Stephane Ouellete, founder and CEO at FRNT Financial.

“Despite the recent rally triggered by the introduction of bitcoin ETFs, all indicators we use to assess market cycles imply we’re far from a widespread FOMO trend in cryptocurrency,” he asserts.

Data such as Google Trends searches, funding for crypto ventures, and transaction volumes point to a nascent stage of the coming bullish phase, if one is on the horizon.

However, this doesn’t necessitate rushing into crypto investments. Experts note that seasoned bitcoin advocates aren’t swayed by ETF launches; instead, they hold faith in bitcoin’s enduring potential as a value reserve and a transformative payment method, particularly in developing nations, and envision a future where blockchain becomes integral to the U.S. economy.

Still, this is speculative territory. Unlike stocks, cryptocurrency valuations aren’t anchored in fundamentals but fluctuate entirely on trading momentum.

“We’re traversing a speculative landscape, and that reality is unchanged,” Vendig remarks.

Vendig urges investors to consider their financial aspirations when pondering crypto allocations in their portfolios. Understanding the role it could play in reaching personal financial objectives can determine the judicious extent of exposure — ranging from a minimal 1% for conservatively inclined investors to a maximum threshold of 5% for those with a growth-oriented strategy.

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