Despite the recent volatility, the majority of bitcoin investors in 2021 were relatively new to the digital asset as the leading cryptocurrency hit an all-time high in October.
A Bloomberg article notes that crypto investment firm Grayscale Investments, LLC, which holds the largest bitcoin fund, surveyed 1,000 people who invested in bitcoin within the last 12 months. About 55% of them just started investing in the leading cryptocurrency this year.
Increased interest in other digital assets like non-fungible tokens (NFTs) is also feeding into more interest in cryptocurrencies. New investors, however, are realizing just how volatile this new asset class can be.
After hitting an all-time high of close to $70,000 during the month of November, bitcoin recently plummeted to under $50,000 this past weekend. It has started to move higher again, but once again, this speaks to its heavy volatility.
“It is becoming increasingly difficult for investors to ignore Bitcoin as its price continues to rise,” the survey says.
Driving More Investors to Bitcoin Via ETFs
What the survey also revealed is that an exchange traded fund (ETF) that caters to bitcoin could help drive more investors to the digital asset space. It could be that investors are still hesitant to get in on the asset, but a gateway to crypto like an ETF might make the transition more smooth.
“Nearly 80% of those polled in the U.S. said they’d be more likely to put money toward the asset class if a Bitcoin exchange-traded fund existed, a product regulators have yet to approve,” the Bloomberg article says. “Respondents were between the ages of 25 and 64 and had primary or shared responsibility for household financial decision-making. All respondents were involved in some form of personal investing, with at least $10,000 in household investable assets and at least $50,000 in household income.”
While there isn’t a fund just yet that invests directly in the cryptocurrency itself, there are options. While a spot price bitcoin ETF effort didn’t get the approval of the Securities and Exchange Commission (SEC), the month of October did see the debut of a bitcoin futures ETF from ProShares.
The ProShares Bitcoin Strategy ETF (BITO) can give investors access to bullish bitcoin prices. BITO is the first U.S. bitcoin-linked ETF that offers investors an opportunity to gain exposure to bitcoin returns in a convenient, liquid, and transparent way by seeking capital appreciation primarily through managed exposure to bitcoin futures contracts.
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