The price of bitcoin is slowly recovering from the recent sell-off thanks to the FTX fallout, but picking a bottom is akin to throwing darts at a board blindfolded.
As Coindesk reported, there are also encouraging signs in the general economic climate that could feed back into a risk-on sentiment to help prop up the leading cryptocurrency. For example, the U.S. Federal Reserve could be pumping the brakes on rate hiking as soon as this month.
In the meantime, bitcoin’s price touched above the $17,000 mark recently after falling below $16,000 in November. Just before the collapse of cryptocurrency exchange FTX, Bitcoin was right around the $21,000 mark.
The recent fall has yet to confirm whether bitcoin has truly reached a bottom or not. As such, investors may want to tread lightly or consider other options in order to brace for any further downward price movements.
“As we have seen three attempts this year that eventually failed, we need to wait for bitcoin prices to trade above their 21-week moving average ($20,851) in order to call for a sustainable rally and a cyclical low,” Markus Thielen, head of research and strategy at crypto-services provider Matrixport, said.
Play a Bitcoin Recovery With Futures
If bitcoin can get out of its current price doldrums, then there are options to consider other than allocating investment capital to the actual cryptocurrency itself. For example, investors can bet on bitcoin futures via an exchange traded fund (ETF) on a regulated stock market exchange, such as the ProShares Bitcoin Strategy ETF (BITO ).
BITO provides the gateway for investors who want crypto exposure to diversify their assets but still want to remain within the safe confines of a regulated market. While the crypto market is growing and the government is looking into shoring up its regulatory structure, BITO can give investors the regulated crypto exposure they desire.
Additionally, the fund is actively managed, giving investors the peace of mind of knowing that their investments are in the hands of seasoned portfolio managers. Bitcoin can be a volatile asset, and active management can make portfolio changes on the fly when market conditions warrant an adjustment.
BITO is an alternative to getting decentralized exposure without direct access to the asset. Given the current economic uncertainty and the recent fallout from the FTX collapse, now could be a good time to do so.
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