Mining the Bitcoin ETF Buzz

Mining the Bitcoin ETF Buzz

January 19, 2024

Industry pundits are buzzing about the recent launch of spot Bitcoin ETFs. Before adding the cryptocurrency to their portfolios, investors should ask themselves: “Why would I expect a positive return?”

Stocks entitle you to a portion of a company's future profits. Bonds provide interest payments and return of capital upon maturity. These can be sound reasons to expect a positive return. But Bitcoin offers neither. For an investor to expect a positive return from merely holding Bitcoin, the investor must hope someone will be willing to pay them more for the coins in the future than what they paid.

Hope can be an exciting motivator. It’s why my husband buys Mega Millions lottery tickets a couple of times a year. But we don’t want to rely on hope in our long-term investment plan when our wealth and future depend on it.

As new investment opportunities arise, a thoughtful approach can help investors mine the buzz and decide whether the fill-in-the-blank investment belongs in your portfolio.

This information is intended for educational purposes and should not be considered a recommendation to buy or sell a particular security. Named securities may be held in accounts managed by Dimensional. Dimensional does not offer cryptocurrency.
All expressions of opinion are subject to change. This information is not meant to constitute investment advice, a recommendation of any securities product or investment strategy (including account type), or an offer of any services or products for sale, nor is it intended to provide a sufficient basis on which to make an investment decision. Investors should consult with a financial professional regarding their individual circumstances before making investment decisions. Diversification neither assures a profit nor guarantees against loss in a declining market. 
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