Bitcoin Milestone Week is due to funds trading on new crypto exchanges collide with the market.
Rick Edelman, an investor and author of bestselling personal finance, believes that deployment will give investors more access.
He finds a buffer ETF, and the ETF is particularly exciting.
“Now you can invest in Bitcoin ETFs that protect you from downside volatility while maintaining your ability to enjoy upward benefits,” Edelman told CNBC’s ETF Edge this week.
Edelman is the founder of the Digital Asset Council, which educates financial advisors on cryptocurrencies. He is also in the Baron Financial Advisors Hall of Fame.
“Cryptocurrency is meant to be a long-term holding, just like the stock market,” Edelman said. “It is intended to diversify our portfolio.”
His thoughts came when the Bitcoin rally began. Cryptocurrency exceeded $100,000 on Thursday for the first time since February. As of the end of Wall Street on Friday, Bitcoin had risen 6% this week. This month it has increased by almost 10% so far.
However, Edelman sees issues with leverage and reverse Bitcoin ETFs. He warns that not all crypto ETFs are suitable for retail investors, suggesting that most people don’t understand how they work.
“The same thing as buying a lottery ticket”
“We assume that these leveraged ETFs often have reset funds every day,” he said. “It’s literally the same as buying a lottery ticket. This isn’t investing.”
In the same interview, “ETF Edge” host Bob Pisani referenced the 2x Bitcoin Strategy ETF (BITX) as an example of leveraged Bitcoin products, including daily fees and resets.
The fund beat Bitcoin this week, jumping over 12%. So far, ETFs have increased by 19%. However, BITX is below Bitcoin this year. It’s up about 1.5%, but Bitcoin is up about 10%.
Volatility Shares is the ETF provider behind BITX.
The company wrote on its website: “Funds are not suitable for all investors. Fund investors may lose the full amount of their investment within a day.”
