The Case for iShares Bitcoin Trust ETF: A Strategic Buy Under $40

The crypto market is on the brink of substantial price gains in the next year or two. Many investors are particularly optimistic about a significant price surge for Bitcoin (CRYPTO: BTC). However, Bitcoin is currently valued at around $65,000 per coin, making it seem overwhelmingly expensive for many. While you can buy a tiny fraction of a Bitcoin, the price per unit is daunting.

Introducing the iShares Bitcoin Trust ETF

IShares Bitcoin Trust ETF (NASDAQ: IBIT). As the most popular exchange-traded fund (ETF) managing a portfolio of actual Bitcoin holdings, its price fluctuates in tandem with Bitcoin itself. This ETF provides a straightforward way to invest in cryptocurrency while being easier to understand due to its modest share prices.

The Benefits of Bitcoin ETFs

Accessibility: You can buy, sell, and hold ETFs in almost any stock brokerage account alongside your other stock and fund holdings.
Regulatory Protection: Traditional ETFs adhere to financial regulations, maintain official reporting requirements, and offer investor protection insurance. Your brokerage even generates tax-reporting forms for these assets, a feature often lacking in crypto brokerages.

These factors enable a broader class of investors, including institutional investors and those with retirement accounts, to trade Bitcoin more easily.

If you’re worried about security breaches or hacker attacks, investing in the ETF adds several layers of protection. The iShares fund is managed by financial giant Blackrock (NYSE: BLK), while actual Bitcoin trades are executed through Coinbase (NASDAQ: COIN) Prime. This structure alleviates concerns about forgetting passwords or losing hardware security keys for your Bitcoin account. Individual investors benefit from extra security provided by Blackrock’s and Coinbase’s expertise and insurance coverage.

Furthermore, the ETF offers a low price of entry. You can buy one-hundred-millionth of a Bitcoin, worth just a tiny fraction of a cent today, but it’s more sensible to deal in whole investment units at reasonable prices. The iShares fund falls in that sweet spot, priced below $100 per share, well above the penny-stock range.

If Bitcoin prices skyrocket in the future, iShares could split its ETF shares like companies do with their stocks, keeping the price within a comfortable range. For instance, if Bitcoin rises to $1,000,000 per coin, as some bullish investors predict, the iShares ETF might rise to approximately $570 per share, but a quick 10-for-1 split could bring it back down to below $100.

Understanding the Impact of a $40 iShares Bitcoin Trust ETF

In essence, spot Bitcoin ETFs like the iShares option will likely continue to provide a lower-priced method to invest in Bitcoin. The actual price of the underlying digital currency becomes irrelevant; investors care about the direction and distance of its long-term pricing trend.

Currently, a price target of $40 for the iShares Bitcoin Trust ETF corresponds to a Bitcoin price near $70,100 per coin, representing about a 7% increase from current prices.

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