Often pitted against each other, gold and Bitcoin are both benefiting from the effects of the current “debasement trade.” In turn, this creates investment opportunities to capture upside in ETFs that offer exposure to cryptocurrencies.
As the Wall Street Journal indicated, the debasement trade stems from the flight to alternative assets like gold and Bitcoin as a way to seek refuge from a declining dollar. This trade could gain further momentum as the U.S. Federal Reserve continue to cut rates.
Bitcoin is often viewed as the digital store of value that sits opposite to the physical variant: gold. As such, they are often considered market rivals, but not so in this current debasement trade environment. Both assets continue to push to new highs while short-term risks like the government shutdown only provide further tailwinds.
“The ongoing US government shutdown has amplified Bitcoin’s safe haven narrative, with investors increasingly rotating from U.S. related assets like treasuries into assets seen as resilient to political dysfunction and inflationary pressure,” said Farzam Ehsani, CEO of crypto exchange VALR.
While Bitcoin continues to see more adoption from traditional finance circles. Some investors may be still hesitant to accept the idiosyncratic risks associated with cryptocurrency investing. ETFs offer an alternative pathway to exposure with funds like the Invesco Galaxy Bitcoin ETF (BTCO). BTCO provides easy exposure to the growth trajectory of bitcoin’s prices in the convenience, cost-effectiveness, flexibility, and tax efficiency of an ETF wrapper.
Rising Stablecoin Adoption
Though it is the proverbial tide that lifts all boats in the crypto market, Bitcoin hasn’t been the only benefactor in the environment. Easing regulatory measures have also paved the way for strength in native cryptocurrencies from blockchain networks like Ethereum. It serves as the backbone for creating stablecoins that act as digital variants of fiat currency like the U.S. dollar. The adoption of stablecoins is another trend to watch, which in turn, could benefit Ethereum.
“I believe that the next wave of crypto adoption will come from stablecoin adoption. And that’s going to be very positive for crypto overall,” Samir Kerbage, chief investment officer at Hashdex, told Yahoo Finance. “This is a trend that might take six months to one year to start to reflect on prices.”
Given Ethereum’s upside, the Invesco Galaxy Ethereum ETF (QETH) offers a similar pathway like BTCO for investing in this digital currency. It provides investors exposure to the growth prospects of ethereum in the dynamic wrapper of an ETF on a regulated exchange.
Both are available with an expense ratio of 25 basis points, or $25 per every $10,000 invested.
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