Bitcoin powerfully rebounded from its $49,000 low in August 2024 and broke through $100,000 in December with Trump's potential return to the White House. Business Insider author Christine Ji shared her two Bitcoin investment choices from last December, both bullish on Bitcoin but with vastly different results, which might offer some investment insights.
During my first Bitcoin investment attempt, I bought a share of BlackRock's iShares Bitcoin Trust (IBIT). Later, I also added a share of Semler Scientific (SMLR), a medical technology company that holds Bitcoin on its balance sheet. I wanted to try different Bitcoin investment methods.
Spot ETF: The Most Direct Way Without Touching Cold Wallets
IBIT physically tracks Bitcoin spot with a 1:1 ratio, has a 0.25% management fee, and is regulated by the SEC. Nasdaq reports that IBIT's assets have exceeded $70 billion, setting the fastest growth record for ETFs and attracting both institutional and retail investors. Expert Robert Cannon noted:
"Spot Bitcoin ETF is currently the cleanest and most convenient way to gain Bitcoin exposure, especially suitable for investors new to cryptocurrency."
In the past six months, IBIT rose 14%, slightly outperforming Bitcoin's 12% and significantly beating S&P 500's 2%. For investors wanting to participate in price movements without managing private keys, Christine considers it a good entry point.
Bitcoin Rises, SMLR Drops
On the other hand, medical device company SMLR lists Bitcoin as a treasury asset, theoretically meaning its stock price should move in sync with Bitcoin's price. However, reality reminds investors that companies holding Bitcoin also face additional operational and regulatory risks.
The Department of Justice is investigating SMLR's medical device marketing practices, causing its stock to evaporate 40% in six months. Cointelegraph's analysis directly states that putting Bitcoin on the balance sheet amplifies operational, reputation, and leverage variables, but not every company can weather volatility like Strategy Inc. or Tesla.
Three Questions to Determine Which Path to Choose
Based on Christine's experience, consider these three questions when investing in Bitcoin:
1. Purpose: Just want to follow price fluctuations, or also bet on company transformation?
2. Cost: IBIT's annual management fee is 0.25%; self-custody avoids annual fees but adds security expenses and requires more knowledge; buying Bitcoin-holding companies requires assessing enterprise leverage and dilution risks.
3. Risk: Bitcoin's high volatility is already stimulating enough; adding company operational uncertainty means investors must withstand double impacts. InvestorDaily believes lacking reserve proof or over-expanded convertible debt might trigger chain selling pressure in bear markets.
