Here’s why I finally decided to buy a Bitcoin ETF.

The emergence of spot Bitcoin exchange-traded funds (ETFs) has opened a new avenue for investors to enter the cryptocurrency market without the complexities of managing cryptocurrency wallets and navigating exchanges. Investors can easily invest with a selection of 11 currently trading ETFs. bitcoin (BTC 1.75%) It is added to your portfolio through your regular brokerage.

Despite my long-held belief that the best way to invest in Bitcoin is to purchase the actual cryptocurrency directly, I recently ended up purchasing shares of one of the new Bitcoin ETFs. While holding Bitcoin directly allows for private storage and 24-hour trading, there are compelling reasons why some investors should consider one of these ETFs.

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my reason

I am not a full-time analyst and writer. While I spend an inordinate amount of time crunching numbers, reading white papers, and analyzing market trends to provide insightful guidance to my readers, I have a full-time job unrelated to The Motley Fool. Fortunately, your full-time employer sponsors tax-advantaged retirement accounts and offers contribution matching programs.

Over the years, I’ve wanted to access my growing retirement savings and allocate some of it to what I believe to be the best asset: Bitcoin. But doing so would require early withdrawal of retirement contributions, which could result in penalties and penalties. Needless to say, my employer only allows access to those funds once the person is no longer employed. So that’s off the table.

Now you might be thinking, “Well, RJ, I can reduce my contributions to my retirement account, subtract the difference, and use it to buy Bitcoin.” While that’s true, there is one flaw with this strategy. If I reduce my contribution, I lose the matching contribution (basically free money) provided by my employer.

After the spot Bitcoin ETF launched in January, I started thinking about this more and more. I thought there had to be a way to take advantage of this opportunity and provide my retirement accounts with some long-awaited Bitcoin exposure.

It could be done, but it was a bit of a complicated process. The company sponsoring the retirement account did not provide access to the new Bitcoin ETF. The only option was some mutual funds that were balanced based on risk tolerance and expected retirement date. It’s another obstacle.

After several phone calls and emails with my employer’s retirement account sponsor, I finally got the answer I was looking for. To access physical Bitcoin ​ETFs, you had to open a Personal Choice Retirement Account (PCRA).

This account had to be set up through a separate brokerage and funds had to be transferred from the retirement account to the PCRA. But after doing that, I could buy whatever ETFs, stocks, or mutual funds I wanted. But as you know, I’ve been keeping an eye on Bitcoin ETFs.

choose the right one

Finally, after all that work, you can now invest in Bitcoin through your tax-advantaged employer-sponsored retirement account. However, there are 11 spot Bitcoin ETFs all doing pretty much the same thing. Which one should I choose?

After some more research, I finally decided on the following: iShares Bitcoin Trust (go 1.27%). It currently has over $17 billion in assets under management, making it the most liquid of the 11 companies. This is a key statistic for this type of fund, as higher liquidity allows the ETF to track the price of Bitcoin more effectively. Additionally, it is managed as follows: black stone (NYSE: BLK)It is one of the most reputable names in the financial industry.

Other candidates such as Bitwise were considered, but Bitcoin ETF (NYSEMKT: BITB) Or VanEck’s Bitcoin Trust (NYSEMKT: HODL) Because of its contribution to funding Bitcoin developers, we felt BlackRock’s experience and reputation, as well as the scale of assets managed by the fund, made it the right choice.

For people in a similar situation to me, who haven’t been able to purchase Bitcoin ETFs in retirement because it’s not an option offered, call your company’s account sponsor and ask to open a PCRA. It may take time to wait or send a few emails, but in the end, you’ll be exposed to some of the best performing assets of the 21st century. And if your employer offers matching contributions, even better. You will receive free Bitcoin.