Tesla Founder and CEO Elon Musk isn’t worried about bitcoin’s recent pullback. Cryptocurrencies have been decimated all year, but Musk says bitcoin in particular will go through “crypto winter.”
After seeing a rally past the $21,000 mark, bitcoin has recently pulled back, falling below $16,000 at one point. The latest drop was the fallout from the FTX calamity, which re-instilled doubt in the cryptocurrency market as a safe means of parking capital.
“FTX, one of the world’s leading cryptocurrency exchanges, came to a drastic and almost instantaneous end,” said a Bitcoin Magazine Article reported. “The company, which presented itself as an ecosystem savior as it continually insisted on acquiring other failing companies to protect consumers, failed to protect its own customers after bankruptcy filing and then get pirate for more than $515 million in consumer assets.
Security measures are already rampant in the cryptocurrency world, casting doubt on the security of exchanges. This has been a constant talking point for the Securities Exchange Commission (SEC) as an obstacle to allowing more bitcoin-related funds to enter the traditional financial infrastructure.
Additionally, inflation fears have the crypto market correlated with stocks and bonds for most of the year. Nevertheless, bitcoin still has a vote of confidence from Elon Musk.
BTC will, but it could be a long winter
— Elon Musk (@elonmusk) November 14, 2022
Exposure to bitcoin futures
The recent pullback could give investors a zone of value for a buying opportunity. While investors may want to invest in bitcoin directly through unregulated crypto exchanges, there is a safer option using the traditional financial route, which has regulatory infrastructure. Investors can consider investing in bitcoin futures through the ProShares Bitcoin Strategy ETF (BITO).
BITO provides the gateway for investors who want exposure to crypto to diversify their assets, but still want to stay within the safe confines of a regulated market. As the crypto market grows and the government plans to strengthen its regulatory structure, BITO can give investors the regulated crypto exposure they want.
Additionally, the fund is actively managed, giving investors the peace of mind of knowing that their investment is in the hands of experienced portfolio managers. Bitcoin can be a volatile asset and active management can make portfolio changes on the fly when market conditions warrant adjustment.
BITO is an alternative to gaining decentralized exposure without direct access to the asset. Given the current economic uncertainty, now might be a good time to do so.
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