Five cryptocurrency funds for buying to aid diversifying offer investors a way to gain exposure to an asset class that could outperform the stock market for the rest of the decade.
Bitcoin amid a price drop that provides a discount from recent highs after the Trump administration ushered in policies last month to enhance interest in the cryptocurrency. With president Trump’s unbridled support, the cryptocurrency market is developing and gaining appeal, as the rising price of Bitcoin hit a new high in July.
Once President Trump won election in November 2024, the price of Bitcoin surged from roughly $70,000 to above $123,000 in July before dipping to $113,887.55 on Tuesday, Aug. 3. The ascent has not been smooth, and the latest price drop could turn into a timely buying opportunity in the days and weeks ahead for those able to stomach the volatility of cryptocurrencies.
Relaxed regulation of cryptocurrency supported by President Trump has been accompanied by increasingly crypto-friendly voting in Congress, too. The latest example is last month’s passage of the GENIUS Act, which set up regulatory norms for the crypto space and solidifies a connection between crypto and the dollar with requirements for backing with U.S. treasury bills, according to the TNT Trader advisory service led by Mark Skousen, PhD, and his son Tim Skousen.
Mark Skousen, head of TNT Trader and Forecasts & Strategies, meets with Paul Dykewicz.
Five Cryptocurrency Funds for Buying to Aid Diversifying: Forecast
This is a great time to own a well-diversified portfolio, according to the Retirement Watch investment newsletter. U.S. stock indexes recently established all-time highs.
But many international stocks lately are doing even better than U.S. stocks. Gold probably will soon break out of the trading range it has been in since late April and resume its multi-year, record-breaking bull market, while Bitcoin and related assets have bounced back from their corrections earlier this year to set new highs, wrote Retirement Watch investment newsletter leader Bob Carlson, a former pension fund chairman. He now is recommending positions in Bitcoin.
Specifically, Bitcoin hit a recent low below $80,000 in early April and quickly began to recover. By mid-July it set a record high above $123,000.
Bob Carlson heads Retirement Watch and his proprietary IRA Caculator
Several factors are behind the latest surge in Bitcoin, Carlson counseled. Exchange-traded funds (ETFs) that hold Bitcoin became available just over a year ago are experiencing increased demand, especially from U.S. investors.
The interest is propelled by favorable regulatory changes in the United States and reports that the Federal Reserve might reduce interest rates later this year, Carlson continued. In addition, more companies are adopting the approach of Strategy (NASDAQ: MSTR), formerly MicroStrategy, of turning themselves into leveraged investors in Bitcoin, he added.
Of course, rallies in Bitcoin always bring into the market new speculators who increase the upward momentum, Carlson commented.
Five Cryptocurrency Funds for Buying to Aid Diversifying: HODL
Cryptocurrency investing is starting to attract investors of all ages, according to the Retirement Watch investment newsletter led by Carlson. He now is recommending that even subscribers to his newsletter aimed at retirees and those seeking to prepare for their non-working years consider holding a small part of their portfolios in Bitcoin.
One way is through the VanEck Bitcoin (HODL) ETF. It is one of several Bitcoin ETFs that provide the same or similar performance, he added.
Blockchain technology makes Bitcoin possible, and companies are using it to develop digital asset exchanges, other digital assets and other financial infrastructure and uses.
It’s a good idea to have another small portion of a portfolio in a diversified group of companies that provide or benefit from this infrastructure.
Chart courtesy of www.stockcharts.com
Five Cryptocurrency Funds for Buying to Aid Diversifying: STCE
Another Carlson recommendation is Schwab Crypto Thematic (STCE). That ETF owns a diversified group of brokers, financial services companies, Bitcoin miners, and other firms that participate in the digital asset and blockchain economy.
It recently held 43 securities, with 59% of the ETF in its 10 largest positions. Top holdings recently were IREN, Cipher Mining, Coinbase, Cleanspark, and Hut 8.
The sector benefited when the broker Coinbase recently was added to the S&P 500.
Chart courtesy of www.stockcharts.com
Five Cryptocurrency Funds for Buying to Aid Diversifying: BLOK
Investors may want to buy shares in equities that are tied to cryptocurrencies like Bitcoin, blockchain technology or both. One speculative recommendation that adds alpha to the Forecasts & Strategies newsletter portfolio is Amplify Transformational Data Fund (NYSEArca: BLOK). The fund invests in crypto and blockchain technology.
BLOK invests in companies that finance cryptocurrencies and blockchain technology. TNT Trader notched an average 120.54% gain in BLOK late in 2024 by buying call options in the fund and selling them in three different segments. The exposure to blockchain technology helps the fund diversify beyond a pure play in Bitcoin.
Chart courtesy of www.stockcharts.com
Five Cryptocurrency Funds for Buying to Aid Diversifying: GBTC
Grayscale Bitcoin Trust (GBTC) is an open-ended trust launched and managed by the world’s biggest crypto asset manager, Grayscale Investments, LLC, to offer access to Bitcoin. GBTC invests through derivatives such as futures, swaps, and other Commodity Futures Trading Commission (CFTC)-regulated products.
The company aims for aggressive growth, while dividend-paying GBTC tracks the performance of the TradeBlock XBX Index. As for trading liquidity, GBTC dominates other Bitcoin-focused funds and exchange-traded products (ETPs).
I personally recommended GBTC for the 2024 MoneyShow special report in late 2023 and it doubled during 2024 to finish as the second-best-performing investment among the more than 40 market forecasters who contributed their top ideas. GBTC rose 137.3% during 2024, following a rise of 317.61% in 2023.
However, Bitcoin also has shown significant volatility, as GBTC fell 75.0% in 2022, after rising 7.0% in 2021, 290.7% in 2020 and 106.5% in 2019. As further proof there is no guaranteed appreciation, GBTC slid 82.1% in 2019.
President Trump’s support for Bitcoin and other cryptocurrencies could help boost their value in 2025. Plus, a key reason why I recommended GBTC in December 2023 still exists. Bitcoin’s launch in 2009 called for the total supply to be limited to no more than 21 million coins. That cap avoids potential inflation of Bitcoin that remains as relevant now as it did then.
Another reason is the Securities and Exchange Commission (SEC) approving the launch of exchange-traded funds to allow trading of cryptocurrencies such as Bitcoin on the spot market like stocks and funds. That happened in January 2024, just as I predicted.
Chart courtesy of www.stockcharts.com
Five Cryptocurrency Funds for Buying to Aid Diversifying: BTC
“There are a lot of big and small players in cryptocurrency, and I feel like investors are entering the Wild West days of this unregulated and relatively new asset class,” said Michelle Connell, the head of Dallas-based Portia Capital Management. “No one needs to be a cowboy.”
Until further process is made on this issue, if an investor feels the need to have exposure to cryptocurrency, Connell said she would recommend allocating monies to Grayscale Bitcoin Mini Trust (BTC), an ETF that is solely and passively invested in Bitcoin.
The fund’s investment objective is to reflect the value of Bitcoin held by the Grayscale Bitcoin Mini Trust, less expenses and other liabilities. Bitcoin’s increasing support by the Trump administration is boosting investor interest in the digital asset that is created and transmitted through the operations of the peer-to-peer Bitcoin Network, a decentralized network of computers that operates on cryptographic protocols. The Bitcoin Network allows people to exchange tokens of value called Bitcoins, which are recorded on a public transaction ledger known as a Blockchain.
“BTC gives an investor exposure to bitcoin without a direct investment in the cryptocurrency and the complexities of setting up an account,” Connell told me. “At 0.15%, the expense ratio is the one of the cheapest ways for an investor to own Bitcoin.”
With Grayscale already having more than 10 years of experience, it is one of the largest crypto managers, Connell continued. Grayscale’s Bitcoin ETF’s assets under management is now “huge” by reaching $5 billion. The fund also should offer liquidity during a financial crisis.
Chart courtesy of www.stockcharts.com
Five Cryptocurrency Funds for Buying to Aid Diversifying: Gold
The historic bull market in gold has slowed, but the forces behind it remain in place.
The major factor the last few years has been global central banks, especially in Asia, reducing their U.S. dollar reserves in favor of gold. That’s in response to the financial sanctions imposed on Russia after it invaded Ukraine. The central bank diversification isn’t completed.
The trade and tariffs war and global conflicts in general also increase demand for gold, said Carlson. The tumbling U.S. dollar also increases the price of gold in dollars, he added.
Five Cryptocurrency Funds for Buying to Aid Diversifying: Summary
The five cryptocurrency funds for buying to and diversifying await a bitcoin rebound to let investors reap rewards are well worth considering for future investment. Investors who are interested in cryptocurrency equities that have gone on sale at discounted prices may be willing to buy now, especially with geopolitical high as wars rage around the world as the market seems to have plateaued recently.
Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for multiple-book pricing.
