Could Buying a Bitcoin ETF Help You Become a Millionaire?

And indeed that seems to be the case. Admittedly, this is still a small sample size considering the new spot Bitcoin ETFs have only been trading for a few months, but they seem to do a great job of tracking Bitcoin’s price behavior. Since the beginning of February, the price of Bitcoin has increased by approximately 49%. During the same period, iShares Bitcoin Trust (NASDAQ: IBIT) rose 49%. And Fidelity Wise Origin Bitcoin Fund (NYSEMKT: FBTC) is up 49%.

This is all important because a growing number of Wall Street investors think the price of Bitcoin will definitely go parabolic between now and 2030. For example, Cathie Wood of Ark Invest thinks Bitcoin will reach a price tag of $1. Considering million Bitcoins are currently trading around $65,000 over the next few years, that’s an almost 15x increase in value in an incredibly short period of time.

If all goes as planned, your new bright spot Bitcoin ETF should be well on its way. If Cathie Wood is right about the future price of Bitcoin and you’re willing to invest a significant amount of cash today, then that money could be worth $1 million by 2030. It sounds too good to be true, but it works to highlight the type of absolutely heroic returns Bitcoin can offer.

Is it time to re-evaluate ETFs?

As you can see from some simple background calculations, these new spot Bitcoin ETFs are not your father’s ETFs. Add in the fact that there are an expanding array of different types of Bitcoin ETFs, such as leveraged ETFs, that pay most of Bitcoin’s overall returns, and you can see that the new Bitcoin ETFs are much more of a “let’s create” type. It is a “let’s try to keep up with the market” tool rather than a “wealth” tool.

The story continues

Image source: Getty Images.

Despite the clear potential for future wealth creation, many investors do not like ETFs, especially the new Bitcoin ETFs. Young investors prefer holding individual stocks and cryptocurrencies, according to The Motley Fool’s research, and it’s not even close. And in other research, The Motley Fool found that the launch of new Bitcoin ETFs had little to no impact on decisions to invest in Bitcoin. When these investors hear the word “ETF” they seem to forget everything you say next.

I think this is a mentality problem. When most young investors think of ETFs, they’re probably thinking of the “boring” S&P 500 ETFs, which contain a basket of 500 stocks. From their point of view, it is not possible for this investment to create millionaires because then everyone would be a millionaire. Instead, they choose to hold a single stock in a hot, fast-growing sector, like a sexy tech stock, and hope for the best.

Should you buy the new spot Bitcoin ETFs?

This is why the new spot Bitcoin ETFs are so interesting. It is specifically designed to hold only one asset. They do not invest in Bitcoin-related stocks or a basket of Bitcoin-related cryptos. They only have Bitcoin. This seems to make them a perfect match for what young investors are looking for.

If you think the price of Bitcoin will rise rapidly over the next few years (admittedly a big “if”), then one of the best possible ways to unlock this millionaire-making potential may be to invest in one of the new Bitcoins. Identify Bitcoin ETFs.

Should you invest $1,000 in iShares Bitcoin Trust right now?

Before buying shares in iShares Bitcoin Trust, consider:

The Motley Fool Stock Advisor analyst team identified what they believe are the 10 best stocks for investors to buy right now… and iShares Bitcoin Trust wasn’t one of them. The 10 stocks that made the cut could deliver monster returns in the coming years.

Consider that Nvidia made this list on April 15, 2005… if you had invested $1,000 on the date we recommended, you would have had $537,557!*

Stock Advisor offers investors an easy-to-follow success plan, including guidance on portfolio construction, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of the S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of April 22, 2024

Dominic Basulto has positions in Bitcoin. The Motley Fool has positions in Bitcoin and recommends it. The Motley Fool has a disclosure policy.

Can Buying a Bitcoin ETF Help You Become a Millionaire? originally published by The Motley Fool