May 18, 2022
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Add us on GoogleBitcoin is on a wild ride.
The world’s largest cryptocurrency soared to $68,990 last November. Now, it’s at around $29,000 — a staggering 58% pullback from the peak.
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If the downtrend continues, Rich Dad Poor Dad author Robert Kiyosaki says he’s ready to start buying.
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“BITCOIN CRASHING. Great news,” he tweeted last week. “I am waiting for Bitcoin to crash to 20k. Will then wait for test of bottom which might be $17k. Once I know bottom is in I back up the truck. Crashes are the best times to get rich.”
Kiyosaki added that bitcoin “is the future of money” and that its bottom may be even lower at $11,000.
In today’s market environment, it’s not easy to be a contrarian investor. But if you share Kiyosaki’s view, here are three simple ways to capitalize on bitcoin's potential rebound.
Buy bitcoin directly
The first option is the most straightforward: If you want to buy bitcoin, just buy bitcoin.
These days, many platforms allow individual investors to buy and sell crypto. Just be aware that some exchanges charge up to 4% in commission fees for each transaction. So look for apps that charge low or even no commissions.
While bitcoin commands a five-figure price tag today, there’s no need to buy a whole coin. Most exchanges allow you to start with as much money as you are willing to spend.
More: Best investing apps
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Bitcoin ETFs
Exchange-traded funds have risen in popularity in recent years. They trade on stock exchanges, so it’s very convenient to buy and sell them. And now, investors can use them to get a piece of the bitcoin action, too.
For instance, ProShares Bitcoin Strategy ETF (BITO) started trading on NYSE Arca in October 2021, marking the first U.S. bitcoin-linked ETF on the market. The fund holds bitcoin futures contracts that trade on the Chicago Mercantile Exchange and has an expense ratio of 0.95%.
There’s also the Valkyrie Bitcoin Strategy ETF (BTF), which made its debut a few days after BITO. This Nasdaq-listed ETF invests in bitcoin futures contracts, and charges an expense ratio of 0.95%.
More: What stocks should I buy now if we're nearing a market bottom?
Bitcoin stocks
When companies tie some of their growth to the crypto market, their shares can often move in tandem with the coins.
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First, we have bitcoin miners. The computing power doesn’t come cheap and energy costs can be substantial. But if the price of bitcoin goes up, miners such as Riot Blockchain (RIOT) and Hut 8 Mining (HUT) will likely receive growing attention from investors.
Then there are intermediaries like Coinbase Global (COIN) and Paypal (PYPL). When more people buy, sell, and use crypto, these platforms stand to benefit.
Finally, there are companies that simply hold a lot of crypto on their balance sheets.
Case in point: enterprise software technologist MicroStrategy (MSTR). It has a market cap of $2.3 billion. Yet its bitcoin count reached 129,218 at the end of March, a stockpile worth around $3.8 billion.
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Jing is an investment reporter for Moneywise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.
