Bitcoin’s Rocky Start to 2025: Should You Buy the ETFs on the Dip

Bitcoin’s price fluctuates as investors weigh economic factors and ETF options

Bitcoin’s Rocky Start to 2025: Should You Buy the ETFs on the Dip
Bitcoin’s Rocky Start to 2025: Should You Buy the ETFs on the Dip

Miami: The cryptocurrency scene is a bit shaky as we kick off 2025. Bitcoin dipped below $90,000 but bounced back to over $97,000. So far, it’s up about 3.8% this month, but other coins like Ether are struggling, down 3.2%.

Investor vibes are changing, with many thinking the Fed might hold off on rate changes for a while. There’s also chatter about how President-elect Trump’s policies could affect inflation, especially with his inauguration just around the corner.

Rising Treasury yields are making folks a bit nervous about crypto investments. Still, Trump’s promise to boost the U.S. as a digital asset hub gives some hope. He’s talking about easing regulations, but we’ll have to wait and see how that plays out.

The jump in Treasury yields is shaking up the whole market, causing sell-offs in both crypto and stocks. The S&P 500 has lost some ground since Trump’s election win, down 0.4% this year as of mid-January.

Bitcoin hit a record high of $108,316 last month, but that rally has cooled off to about 40%. Analyst Katie Stockton says Bitcoin is in a “corrective phase” and might test support around $87,500.

In the last few days, U.S. spot-Bitcoin ETFs have seen about $1.6 billion in outflows, showing that investors are being cautious as they wait for clearer signals on policies and the economy.

But there’s still some optimism. Richard Galvin from DACM thinks Trump might push out crypto-friendly executive orders soon after taking office.

Despite the ups and downs, crypto fans are still hopeful. MicroStrategy has been on a buying spree, adding to its Bitcoin stash, which is now worth around $41 billion.

With Bitcoin’s popularity soaring since last year, asset managers are getting creative. Calamos is launching a new ETF that aims to give investors exposure to Bitcoin while protecting against losses.

This new ETF, called the Calamos Bitcoin Structured Alt Protection, is set to launch soon and is part of a series that offers downside protection on major indices.

Fed Chair Jerome Powell recently compared Bitcoin to gold, saying it’s more of a speculative asset. Interestingly, BlackRock’s Bitcoin ETF has over $50 billion in assets, surpassing its gold ETF.

So, should you buy the dip in Bitcoin? Maybe, but experts suggest keeping it to no more than 2% of your portfolio to manage risk.

If you’re looking for a safer bet, consider Bitcoin ETFs like Grayscale or Fidelity’s offerings. They’re easier to trade and often more tax-efficient than holding Bitcoin directly. Plus, you avoid risks like hacking or losing your keys.

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