Why ETFs are a great way to enter the world of cryptocurrencies: Strategist

Ethereum (ETH-USD) is on the rise following speculation that the Securities and Exchange Commission (SEC) may approve ether ETFs. Cinthia Murphy, Investment Strategist at VettaFi, joins Wealth! to discuss cryptocurrency ETFs and what the latest news could signal for the sector.

Spot Bitcoin ETFs were approved earlier this year and have seen “robust demand,” according to Murphy. The success has fueled interest in other crypto ETFs: “It took about ten years for regulators to agree to spot bitcoin ETFs. And now, five months later, we’re talking about spot ether ETFs,” he adds the strategist.

He says those looking to get into crypto should invest in spot ETFs and also points to gold ETFs as a “phenomenal” opportunity to diversify portfolios.

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This post was written by Melanie Riehl

Video transcription

If this week’s surge after the securities and exchange commission known in your neighborhood as the sec signals, they are ready to proceed with ETF approval for the currency based on certain criteria.

Now, this comes as Bitcoin surges to 71,000 thanks to increased spot ETF buying as part of the ETF report presented by invest QQQ joining me.

Now we’ve asked Cynthia Murphy to check out her investment strategy to break down how the S cryptocurrency ETF could or should be your next move here.

All right.

So for those who are curious about how to leverage cryptocurrencies within their ETF portfolio here, what are the key considerations that they should keep in mind, Cynthia, hey, Brad, you know, there’s a lot going on in this space and much more we didn’t expect to unfold in this space this week.

So, you know, if you’re a crypto enthusiast or you’re interested in the crypto space, obviously, 2024 was the year of the Bitcoin Spot ETF approvals, those products are available, they’re tried, tested, and the demand has proven to increase be really robust, not only in the retail channels, but also in the institutional one.

Which I think surprised a lot of us.

So, if you want to get into cryptocurrencies as an advisor or even as a retail seller via an ETF, these spot products are available today.

There are also futures products that have been on the market for a couple of years already.

It’s all good, you know, good, and done.

What is at stake here now is the potential arrival of the Ether ETF.

So the next level, the next wave of crypto products in ETF wrappers and that’s what we’re, you know, watching carefully.

Will it happen this week?

We took it for granted that it wouldn’t happen.

It all happened so fast that it took, you have to remember, it took about 10 years for the regulators to agree to the spot, Bitcoin ETF S and now in five months, we’re talking about spot their ETF S but we’re looking this week, whether these will be instruments that will be approved for investors around the world.

The story continues

It’s immediately clear where, if we see massive inflows into cryptocurrency-specific spot ETFs as we’ve seen with Bitcoin or as we’re about to potentially see with Ether or Ethereum, where else in the ETF landscape is set to see perhaps some outflows as perhaps there’s more fanfare or attention that gets stirred up for the cryptocurrency touching the ETF S. You know, I love that question that’s raised because it actually touches on something that we’ve all been wondering about all year, which is gold.

ETF S. So gold has had phenomenal performance, really strong as an asset.

We keep reading about central banks around the world buying gold like crazy, you know the sticky inflation story is still supporting the space and you know, everyone probably goes for gold, for safety and yet we don’t see the demand manifests itself in ETF S as much as one would expect given the performance.

And one of the conversations we’ve had is, is it because there are other options that cryptocurrency is one of them?

So it was pretty interesting that looking for alternatives in a portfolio, diversification, which is like risk management for, you know, risks that we don’t typically see, went into gold.

But now cryptocurrencies are emerging as another interesting option, the same goes a bit for commodities.

But it’s been pretty fascinating to see, you know, where these flows end up, right at the end, as we have you here, Cynthia copper is up over 27% this year.

I mean, there’s been a lot of fanfare around this and precious metals and their counterparts, gold and silver, have also risen this year.

Is this a space that investors should pay more attention to right now?

Yes, metals have had a big story this year and on the copper side there’s the industrial metals story, I mean copper is key to almost everything we’re trying to do from the energy transition to industrial manufacturing , all kinds of things.

So copper is a really, really strong metal for the future that we’re headed into in terms of energy production and all of these things.

So it makes sense that it’s really cool.

But you have to remember, things like industrial models like copper, that are very dependent on economic growth.

So we need to continue to see, as you know, GDP growth and economic activity for industrial models to remain a strong player.

Cynthia Murphy, who is the verified investment strategist, Cynthia.

Good to see you.

Thank you so much for coming with us.

Thanks for having me.

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