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Jun 04, 2021  |  News

Bitcoin Finds Investment Portfolio Niche; Crude Oil Reaches Pre-Pandemic Price

(Newsweek) When building a portfolio, Bitcoin vs. gold is the wrong debate, a fund manager believes.

Instead, investors should establish their goals, define the appetite for risk, keep an eye on the actuarial tables and develop a mix of assets to generate the desired yield.

In some cases, Bitcoin can be part of the investment strategy.

“It’s not about avoidance but rather portfolio construction based on an individual’s investment goals or situation,” Bill Herrmann, Co-Founder and Managing Partner at Wilshire Phoenix in New York told Newsweek.

“For example, if a person recently retired or is soon to be,” he said, “that person would likely focus on capital preservation or generating income from their investments.”

Investing in Bitcoin can be intimidating for some—especially when investors buying directly from an online trading platform can be hit with high fees.

An Exchange Traded Fund (ETF) would be the simplest option for many investors, but none is available in the U.S.

“A Bitcoin ETF would be the most accessible and convenient way for most investors to obtain exposure to Bitcoin, but I don’t think anyone should hold their breath waiting on approval in the United States,” Herrmann said.

He said that companies keep pursuing them, but progress has been difficult.

“It runs the imagination why so many firms have recently filed applications for Bitcoin ETFs, when the Securities and Exchange Commission has made it quite clear that there are significant hurdles that they need to overcome,” Hermann said. “Instead, these firms should consider donating the high legal and other fees associated with their filings to charitable organizations.”

An ETF tracks an index, commodity, sector or other asset such as cryptocurrency. The fund can be purchased or sold on a stock exchange like the shares of any publicly listed company. The strategy can include the purchase of a range of stocks in a sector to spread the risk, but ETFs also can be tailored to commodities using varying investment strategies.

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