Still on the Fence About Cryptocurrency? This Exchange-Traded Fund Could Be Perfect for You

That might change in the future as crypto goes increasingly mainstream. Coinbase Global (NASDAQ: COIN), for example, recently created the Coinbase 50 Index, which is designed to track the performance of the top 50 cryptocurrencies, with plans to offer investment products based on that index. But right now, U.S. regulators have not signed off on the specific financial products required to track that index.

You’re probably aware that Bitcoin has been one of the best-performing assets in the world over the past decade. While it can be volatile, and is prone to severe downturns every few years, you need to keep your eye on the long term. The leading crypto has a track record of outperforming every other asset class over the long haul.

In the period from 2011 to 2021, for example, it delivered annualized returns of 230% to investors. In contrast, the next-best asset class (tech stocks) delivered returns of just 20%. Based on that track record of performance, you should be looking for an investment product that offers nearly 1:1 tracking of Bitcoin’s price.

And as you can see in the chart above, that’s just about exactly what the iShares Bitcoin Trust delivers. The blue line above represents Bitcoin’s price movements, while the red line represents the ETF’s share-price changes. While any ETF is prone to a certain degree of tracking errors, the iShares Trust has been remarkably good at tracking the performance of Bitcoin. You could say that this spot ETF’s tracking since January has been, well, spot on.

From my perspective, the low cost, efficiency, and transparency of the iShares Bitcoin Trust make it a fantastic way to get exposure to Bitcoin. It’s as easy to buy and sell as any other ETF, and it gives you 1:1 exposure to the crypto’s long-run price performance. As long as that price continues to soar higher, I can’t think of a better product for first-time crypto investors.

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Dominic Basulto has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, and Ethereum. The Motley Fool has a disclosure policy.

Still on the Fence About Cryptocurrency? This Exchange-Traded Fund Could Be Perfect for You was originally published by The Motley Fool