Ric Edelman, a respected investor and once the nation’s best-selling personal finance author, recently wrote about the crypto ETF explosion, and here’s what he had to say. He unpacked these changes further in an interview on CNBC’s “ETF Edge.” Edelman, the founder of the Digital Assets Council of Financial Professionals, emphasizes tackling the informative educational effort for financial advisors who need focused guidance on nuances of cryptos. This is particularly important in light of the crypto boom currently underway.
Add to that the most recent rollout of new crypto ETFs, and access has exploded for investors to gain exposure to this asset class with tremendous upside potential. Edelman cautions that this new development might be a blessing for the cryptocurious seeking to add some crypto-assets to their portfolio. This is why he argues the present market dynamics come with especially promising opportunities. That is particularly the case as Bitcoin prices have recently soared over the $100k mark.
Edelman is worried about some products in this fast-growing market. In particular, he refers to leveraged and inverse Bitcoin ETFs, cautioning investors about the risks that these products carry.
“These leveraged ETFs often have an assumption you’re going to hold the fund for a single day, a daily reset,” – Ric Edelman
Edelman warns that these kinds of investments can be deceptive. He likens them to gambling, stating, “That’s literally the same thing as buying a lottery ticket. This isn’t investing.”
During his talk, Edelman emphasizes that cryptocurrencies must be approached as a long-term investment. He stated, “Crypto is meant to be a long-term hold, just like the stock market.” His view is in line with a considerable body of financial expert opinion that argues that when faced with rapidly destabilizing assets, a surgical approach is warranted.
In addition, Edelman’s fund has done tremendously well this week, even outpacing Bitcoin with a more than 12% increase! The 2x Bitcoin Strategy ETF (BITX), which has rocketed almost 10% this month and is up 19% year-to-date, reports Barron’s, MarketWatch, and others. It still lags behind Bitcoin’s year-to-date performance.
Even more importantly, Edelman wants you to know about the temptation of these leveraged products. As he cautions, daily fees and resets can make it difficult to execute long-term investment strategies.
“You can now invest in bitcoin ETFs that protect you against the downside volatility while preserving your ability to enjoy the upside profits,” – Ric Edelman
As a member of Barron’s Financial Advisor Hall of Fame and an expert in addressing crypto confusion among long-term investors, Edelman’s insights provide critical guidance for navigating the evolving landscape of cryptocurrency investments.
Leave a Reply