Financial Insights That Matter
Shares of the iShares Bitcoin Trust ETF (NASDAQ: Will go) fell 17% in February, according to data from S&P Global Market Intelligence. The BlackRock exchange-traded fund essentially tracks the price of Bitcoin.
Like most assets considered risky, the Bitcoin ETF plunged in February, as investors grew skittish over the economy. Those fears were prompted by plunging consumer-sentiment readings, as President Trump threatened tariffs on several countries and large-scale federal layoffs led to fears of an upcoming recession.
Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »
Bitcoin is no safe haven, at least not yet
Bitcoin evangelists have touted its possibilities as a store of value in the event other currencies lose value due to inflation. However, as has been the case in recent market history, the cryptocurrency has really behaved more like a volatile technology stock.
In 2022, when inflation shot up, one might have thought Bitcoin would remain resilient as a hedge, as some had believed it would. However, the price actually plunged, just like many other stocks in various sectors, before recovering.
The crypto also entered February near all-time highs just over $100,000, with a big bump coming after the November election. President Trump had promised to de-regulate the cryptocurrency industry and make America the “Bitcoin capital of the world.” He had also vowed to create a Strategic Bitcoin Reserve.
However, the digital token, like many stocks that shot up in the aftermath of the election, soon fell back to earth, as economic uncertainty erased the post-election bump. Tariff fears emerged throughout February, as the administration announced a one-month delay on tariffs on Mexico, Canada, and China set for Feb. 1.
Through February, the prospect of tariffs and federal layoffs under the Department of Government Efficiency program ramped up as the deadline drew near, causing several highly negative consumer sentiment readings. The threatened tariffs actually did go into effect on March 4, although on Thursday, the administration soon carved out another one-month delay for certain goods covered under the 2020 U.S.-Mexico-Canada trade agreement.
All the uncertainty combined to make investors fear an economic downturn in late February, and therefore flee risk assets, Bitcoin included.
Where does Bitcoin go from here?
It appears Trump is at least making good on one of his promises: to create a Strategic Bitcoin Reserve, or at least in part. On Thursday, David Sacks, the administration’s “crypto czar,” announced that the president had signed an executive order creating the strategic reserve. However, it won’t be funded via new purchases by the government but will rather be formed by retaining the roughly 200,000 bitcoins the government had already seized in criminal and civil proceedings.
Sacks pointed out that the government had previously sold off $366 million of seized Bitcoin, and those holdings would have been worth $17 billion today had the government held on to them. He also said the executive order allows for the Treasury and Commerce departments to buy additional Bitcoin in “budget-neutral ways,” which likely means without directly using taxpayer funds.
Bitcoin evangelists may have been expecting more following the election, as many likely hoped the government would actually purchase the cryptocurrency on a regular basis, increasing market demand. Notably, it remained near its year-to-date lows, even after Sacks’ announcement.
Should you invest $1,000 in iShares Bitcoin Trust right now?
Before you buy stock in iShares Bitcoin Trust, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and iShares Bitcoin Trust wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $690,624!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of March 3, 2025
Billy Duberstein and/or his clients have positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
#1a73e8;">Boost Your Financial Knowledge and Achieve Stability
Discover a growing online community dedicated to delivering financial news, tips, and strategies designed to help you manage money effectively, save smarter, and grow your investments with confidence.
#1a73e8;">Top Financial Tips for Saving and Investing
- Personal Finance Management: Master the art of budgeting, expense tracking, and building a strong financial foundation.
- Investment Opportunities: Stay updated on market trends, learn about stocks, and explore secure ways to grow your wealth.
- Expert Money-Saving Advice: Access proven techniques to reduce expenses and maximize your financial potential.