Earlier this month, the 12 spot bitcoin ETFs collectively surpassed $100 billion in assets under management, marking one of the most successful ETF launches in history. Despite recent volatility, the price of bitcoin was still up nearly 120% year to date, as of Dec. 20, fueled in part by the pro-crypto policy proposed by President-elect Donald Trump.The U.S. Securities and Exchange Commission approved the first spot bitcoin ETFs in January.
Bitcoin ETFs give investors a traditional way to buy an untraditional asset, said certified financial planner Douglas Boneparth, president of Bone Fide Wealth in New York. Some 59% of financial advisors are not currently using or discussing cryptocurrency with their clients, according to a survey released in June from Cerulli Associates. The survey polled 271 advisors during the first quarter of 2024, when the price of bitcoin was lower. If you are eager to add bitcoin ETFs to your portfolio, Arnott suggests keeping your allocation small — around 2% to 3%, maximum — and rebalancing regularly. Your allocation should be based on your goals, risk tolerance and timeline. Without rebalancing, a ballooning bitcoin ETF position could have a drastic impact on the overall portfolio's risk profile, she said. You can follow a rebalancing policy by trimming profits whenever your bitcoin ETF allocation exceeds a predetermined percent of your portfolio, Arnott said. That requires regular monitoring