Should You Buy iShares Bitcoin Trust ETF While It’s Less Than $40? #NewsETFs

The crypto market is poised for serious price gains over the next year or two. In particular, many investors look forward to a significant price jump for Bitcoin (BTC -0.40%).

But the oldest and largest cryptocurrency is already worth about $65,000 per coin. You can buy a very small fraction of a full Bitcoin, but the digital currency itself looks overwhelmingly expensive.

Well, what if I told you there are other ways to make Bitcoin investments, where the price per unit is a more manageable $37 today?

I’m talking about the iShares Bitcoin Trust ETF (GO 1.49%). This is the most popular exchange-traded fund (ETF) that manages a basket of actual Bitcoin holdings. Its price moves up and down in lockstep with Bitcoin itself, making the ETF a pretty direct way to invest in cryptocurrency. And it should be much easier to wrap your head around the ETF’s modest share prices.

The benefits of Bitcoin ETFs

The ETF structure comes with many benefits, but the low price is often overlooked.

• You can buy, sell, and hold ETFs in almost every stock brokerage account, alongside your other stock and fund holdings.
• The traditional ETF structure comes with financial regulations, official reporting requirements, and investor protection insurance. Your brokerage generates tax-reporting forms for these assets. Many of these features are not available from a crypto brokerage.
• The first two points allow entire classes of investors to trade Bitcoin, where they couldn’t before. For example, this applies to institutional investors and retirement accounts.
• If you’re concerned about security breaches and hacker attacks, the ETF adds several layers of extra security. The iShares fund is managed by financial services colossus Blackrock (BLK 0.02%)and the actual Bitcoin trades are executed by the Coinbase (COIN 6.28%) Prime service. And you’ll never have to worry about forgetting a crucial password or losing a hardware security key to your Bitcoin account. The individual investor stands a double arms-length away from data security risks, protected by Blackrock’s and Coinbase’s operating expertise and insurance coverage.

And then there’s the low price of entry. You can buy one hundred-millionth of a Bitcoin, worth a small fraction of a cent today, but it just makes more sense to deal with whole investment units at reasonable prices. The iShares fund sits in that Goldilocks range, below $100 per share and high above the dreaded penny-stock area.

If Bitcoin prices skyrocket some fine day, iShares could split its ETF shares much like companies split their stocks. So the price will likely stay at a comfortable level as long as the fund exists. In a world where Bitcoin’s price soars to $1,000,000 per coin, as some bullish investors expect, the iShares ETF would naturally rise to roughly $570 per share. A quick 10-for-1 split would bring it back down to the sub-$100 arena.

What a $40 iShares Bitcoin Trust ETF would mean

In other words, spot Bitcoin ETFs such as the iShares option will probably always offer a lower-priced method to invest in Bitcoin. The underlying digital currency’s actual price doesn’t make a difference — investors only care about the direction and distance of its long-term pricing trend.

In the current market, a $40 price target for the iShares Bitcoin Trust ETF works out to a Bitcoin price near $70,100 per coin. Either way, that’s about 7% above the fund’s and cryptocurrency’s present prices.

I can’t promise that those prices will soar in 2025. Cryptocurrencies are too volatile and unpredictable for that kind of talk. But the cryptocurrency recently executed its fourth halving of mining rewards, and the first three all led up to soaring Bitcoin prices in the next year or two. And for the commonly discussed reasons listed earlier, the availability of spot Bitcoin ETFs could add more fuel to this halving cycle’s market fires.

So I wouldn’t be surprised to see the iShares Bitcoin Trust ETF rise to $60 or even $80 per share in 2025. That’s the equivalent of Bitcoin price targets in the $100,000 to $130,000 range — served in more manageable bite sizes.

I see Bitcoin as a reasonable addition to any long-term investment portfolio nowadays, and the iShares fund makes it easy to take that first step into the crypto sector.