Top Ways to Trade the Latest Rally in Bitcoin

Jun 22, 2023

After pulling back, Bitcoin (BTC) is showing big signs of life again.

In fact, after dipping to $25,500, the digital currency is back to 430,319 –and could see higher highs. All thanks to BlackRock’s surprise filing for a US spot Bitcoin ETF, which led to similar applications from other firms. From here, the direction of BTC depends on the US SEC’s decision on the potential ETF. If they said it’s good to go, Bitcoin could explode in value.

“If [BlackRock’s] Bitcoin ETF is approved, that will open the floodgates of institutional adoption of Bitcoin. As a result, that will likely drive the price of Bitcoin significantly,” said Kate Laurence, the CEO of crypto-focused venture-capital fund Bloccelerate VC, as quoted by Barron’s.

There are a few ways to trade the news.

One, investors can pick up mining stocks, such as Marathon Digital (MARA) and Riot Platforms (RIOT). All because mining revenue is highly dependent on the value of Bitcoin. Better, where BTC goes, miners typically follow. Two, we can look at companies, like MicroStrategy (MSTR), which hold millions of dollars’ worth of Bitcoin. Or, we can look at ETFs.

The ProShares Bitcoin Strategy ETF (BITO)

When Bitcoin pushes aggressively higher, we can look at the Pro Shares Bitcoin Strategy ETF (BITO). With an expense ratio of 0.95%, the ETF tracks the performance of spot Bitcoin, and is the world’s largest and most actively traded cryptocurrency ETF, according to ProShares.

BITO is mimicking the price of Bitcoin as closely as possible without investing in the cryptocurrency itself. As noted by Money, “Like all crypto ETFs, part of the allure of BITO is that investors don’t need to deal with cryptocurrency wallets and private keys but can instead invest through a broker they already use.”

The ProShares Short Bitcoin (BITI)

Or, if you believe Bitcoin will drop in price as it has been doing, or if you want to hedge a long bet, there’s also the ProShares Short Bitcoin (BITI). This one follows the S&P CME Bitcoin Futures Index, with profitability computed daily (before fees and expenses) as the inverse (-1x) of the index’s daily performance. BITI has an expense ratio of 0.97%. BITI can always be used as a hedge against long positions.

Let’s wait and see what happens next with a potential ETF.

Hopefully, we’ll have some great news to share.

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