Bitcoin has officially gone mainstream.
With the launch of the first bitcoin futures ETF, the world’s leading cryptocurrency is enjoying a nice surge, recently passing an all-time high of almost $65,000.
But there might be plenty of room left to run.
According to top Wall Street strategist Thomas Lee — co-founder of Fundstrat Global Advisors — the price of bitcoin could soar to $168,000 by year-end, representing upside of about 170%.
The reason?
Lee estimates that the new bitcoin ETF may attract a whopping $50 billion in inflows during its first year, serving as a key short-term driver for the token’s price.
“We think Bitcoin demand will exceed the inflows for QQQ,” Lee wrote in a note to investors earlier this week.
He’s referring to Invesco QQQ Trust Series 1 ETF, which tracks the Nasdaq 100 Index and is currently the fifth-largest ETF in the U.S.
If Lee is right, we’re still in the early innings of the cryptocurrency bull market.
So here’s how you can get a piece of the action — even if you’re starting with just some of your spare change.
ProShares Bitcoin Strategy ETF (BITO)
This is the ETF that’s making all the headlines.
ProShares Bitcoin Strategy ETF doesn’t invest in bitcoin directly. Instead, the fund holds bitcoin futures contracts that trade on the Chicago Mercantile Exchange.
BITO made its debut on Oct. 19, starting with $20 million of seed capital. By the end of the day, it had jumped 4.8% and hauled in more than $570 million in assets.
The momentum continued on Wednesday as the price of bitcoin surpassed $65,000 for the first time, with BITO gaining another 3%.
Investing in ETFs is as easy as buying a stock. They’re listed on major stock exchanges and trade throughout the trading day.
But of course, you can also invest in Bitcoin directly. These days, some investing apps allow you to buy cryptocurrencies and ETFs commission-free.
Bitcoin stocks
If you don’t want direct exposure, consider investing in companies that are highly exposed to the crypto market.
Tesla, for instance, owns close to 42,000 bitcoins according to CEO Elon Musk’s Twitter account. When bitcoin moves, Tesla shares tend to follow suit.
PayPal is another crypto play. Last October, the company launched a service in the U.S. that allowed users to buy, sell, and hold cryptocurrencies. It introduced a similar product for the U.K. in late August.
And then there’s Coinbase, which runs the largest cryptocurrency exchange in the U.S. Its retail monthly transacting users reached 8.8 million at the end of Q2.
To be sure, these stocks aren’t cheap. Tesla trades at around $866, PayPal is at $255, while Coinbase commands a share price of over $300 thanks to the recent rally in cryptocurrencies.
But you can get a piece of these bitcoin plays using a popular stock trading app that allows you to buy fractions of shares with as much money as you’re willing to spend.
Buy bitcoin directly
While plenty of excitement surrounds new bitcoin ETFs, don’t forget the most straightforward way to invest in cryptocurrencies: buying the tokens directly.
Things are volatile in the crypto world, but bulls like Lee see a new equilibrium in supply and demand for bitcoin in the price range of $168,000.
Today, many crypto exchanges charge up to 4% in commission fees just to buy and sell crypto, but some investing apps charge 0%.
And there’s no need to buy a whole coin. You can start with as a little as $1.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
