Should You Invest In Bitcoin In 2025? | Global News Avenue

Bitcoin (Bitcoin USD) performed well this year, rising to Over $100,000some analysts expect it to be flat Higher next year. While this may tempt you to consider investing in it, financial advisors remain wary of recommending cryptocurrencies to clients and recommend allocating only a small portion of your portfolio to it.

although Federal Reserve’s (Federal Reserve) Recent Forecasts Fewer interest rate cuts Despite falling prices over the next year, Bitcoin prices have more than doubled this year. If the Fed slows down its pace of rate cuts, U.S. Treasury yields will remain high and attract more investors compared to riskier assets like Bitcoin.

Experts advise caution when investing in Bitcoin

Asset management firm Blackrock recently said that 1%-2% of Bitcoin exposure in a portfolio is a “reasonable range.”

Notably, BlackRock operates the largest spot Bitcoin ETF, the iShares Bitcoin Trust (it will go), some advisors also agree with limited allocations to Bitcoin.

Malcolm Ethridge said: “If prices do appreciate… it will still deliver meaningful outperformance to the portfolio.” Certified Financial Planner (CFP) and managing partner of the Capital Region Planning Group. “But if it doesn’t live up to its promise and the price drops to zero, it won’t wipe them out completely.”

Bitcoin is an extremely volatile asset, and investing just a small amount could mean limiting its downside.

“This should be considered something outside of core investments because they are so volatile and you can lose a lot of money,” he said. David Rosenstrock, CFP, founder of Wharton Wealth Planning.

Scott Sturgeon, CFP and founder of Oread Wealth Partners, advises people to reflect on why they really want to invest in Bitcoin.

“If you want to invest in it because you think it’s an uncorrelated asset or a hedge against inflation, maybe that’s the reason to invest,” Sturgeon said. “Conversely, if you were looking to buy it just because it’s up 120% year to date, I would probably suggest you’re just chasing returns and speculating more than investing.”

Should you buy Bitcoin, choose an ETF, or consider a proxy?

If you’re convinced that investing in Bitcoin is right for you, then you need to decide how to put your money into it. Your options include buying cryptocurrencies directly, investing in a Bitcoin ETF or fund, or buying shares of Bitcoin-related companies.

Douglas Boneparth, CFP and president of Bone Fide Wealth, educates clients about cryptocurrencies but does not solicit investments. He personally started investing in Bitcoin in 2024 and prefers investing in Bitcoin directly rather than investing in Bitcoin. Spot ETFs Or a stock like MicroStrategy (Magnetic transmission technology), a Bitcoin holding company considered Cryptocurrency Broker.

“I’m a purist and believe that if you’re going to own Bitcoin, the best way to do it is to actually own the cryptocurrency itself and store it on a hardware wallet,” Boneparth said. “In the case of Microstrategy, you’re essentially buying leveraged Bitcoin – they load their balance sheet with Bitcoin and use a lot of debt to buy it on the open market… You’re buying a riskier Bitcoin asset.”

However, for investors new to cryptocurrencies, advisors say spot ETFs may be a better option. That way you don’t need Bitcoin wallet Hold cryptocurrencies and trade ETFs through your brokerage account. Still, be sure to pay attention to the fees.

“If you’re new to this space and you’re a long-term investor, it’s relatively easy to use ETFs,” Sturgeon said.