πππThe markets were on roller coaster mode last week as the Middle East conflicts intensified with the Israeli response to the Iranian missiles attack. The Feds are also indicating a higher for longer interest rates due to sticky inflation.
In the midst of all these events, Bitcoin's latest having event occurred on Friday night. Soon after the highly anticipated event, the price of Bitcoin held steady at around USD 63,907.
Now all eyes are focused on what's next for Bitcoin. In any geopolitical conflicts, there is a tendency for investors to gravitate towards safe haven assets like Gold and US Dollars, being the world's reserve currency. Bitcoin has seen its all time high of USD 75,830 on March 14 2024. Since then, it has lost steam as it is regarded as a speculative asset.
In the midst of this volatility, $iShares Blockchain and Tech ETF(IBLC)$ is my tactical bet on Bitcoin Halving Event. IBLC tracks an index of global companies that are involved in the development, innovation and utilisation of Blockchain and Crypto Technologies.
IBLC selects Tier 1 companies - those who are involved in Cryptocurrency Mining, Cryptocurrency Currency Trading and Exchanges, Crypto Mining Systems or Blockchain Technologies.
IBLC also selects Tier 2 companies - those that design and manufacture Graphics Processing Units (GPU) chips necessary for mining.
The Top 10 holdings include $Marathon Digital Holdings Inc(MARA)$ $Riot Platforms(RIOT)$ $Coinbase Global, Inc.(COIN)$
The Top 10 holdings weightage is 70%. Total number of holdings is 36. The expense ratio is 0.47%. Distributions are paid every 6 months. The current Distribution yield is 2.15%.
Marathon Digital, Riot Platforms, Cleanspark, Bitfarms are major crypto Miners. Coinbase is the largest US Cryptocurrency platform. Coinbase also is the number 1 Bitcoin custodian for 7 of the 11 Spot Bitcoin ETFs.
Nvidia and AMD provide the GPUs required for mining.
Performance wise IBLC is up 1.5% on Friday but down 2.7% last week. It has dropped 9.7% year todate but in 2023 IBLC did well with 58% capital growth.
Wall Street Analysts are bullish on IBLC with a Buy rating Target price of USD 38.39, an upside potential of 52%, according to Tipranks.
I like IBLC for its value for money, low cost entry point to tap into the Cryptocurrency markets and Bitcoin. It is also diversified and mitigate the impact of negative news that may affect any of its holdings than if I was to invest in the stocks individually. Best of all I receive regular dividends which is a great source of passive income while waiting for capital growth. In contrast Spot Bitcoin ETFs do not pay any dividends at all but depend on capital growth.
In volatile markets, it is better to take a more cautious approach to investing. That is why I have invested in IBLC to provides me with the exposure to the crypto markets with less volatility than investing in cryptocurrencies directly.
There is no right or wrong way in investing, just what suits each person's goals and risk appetite.
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