The digital economy is coming. This ETF could be the easiest way to position your portfolio for the future.
Bitcoin‘s (BTC -1.64%) price continues to be a volatile but lucrative ride.
The flagship cryptocurrency has ebbed and flowed, but when it’s all said and done, Bitcoin’s price is up nearly 60% today from where it was a year ago. I don’t think Bitcoin’s run is over, and that makes the Grayscale Bitcoin Trust ETF (GBTC -3.58%) a no-brainer investment at under $100 per share.
Investing in the Grayscale Bitcoin Trust ETF is an easy way to add Bitcoin exposure to your portfolio. It’s a spot Bitcoin ETF, meaning you can buy it and sell it within your typical investment account. There’s no fussing with crypto wallets or anything like that.
Interested? Good. Read on to see why the ETF could head much higher over the long run.
Image source: Getty Images.
Here is why it’s worth having some Bitcoin exposure in a long-term portfolio
In addition to being the original cryptocurrency and the largest by market capitalization today, Bitcoin serves as a hedge against inflation. You can’t easily run out and buy a slice of pizza with Bitcoin, but it’s valued and has a capped supply. Many view Bitcoin as a digital version of gold.
The United States government has slowly developed a spending problem since moving from a gold-backed dollar to a fiat currency in 1971. The country’s debt has continued to accumulate as the government spends more than it brings in via taxes. When the government borrows by selling Treasuries, it essentially adds more dollars to the economy’s money supply.
Data by YCharts.
In a nutshell, inflation, which is the erosion of the U.S. dollar’s purchasing power, occurs when the money supply grows too rapidly. As a consumer, you see this in the form of higher prices for goods and services. Bitcoin’s price is denominated in U.S. dollars, so as long as the above chart continues trending this way, it’s a tailwind for Bitcoin’s price.
America may struggle to kick its spending habit
President Donald Trump and Elon Musk created the Department of Government Efficiency, or DOGE, earlier this year as an attempt to analyze government spending and identify areas where cuts could help reduce the federal deficit.
It’s probably safe to say that DOGE failed at this point. Musk has returned to working at his companies. Meanwhile, DOGE has only recommended an estimated, and unverifiable, $180 billion in savings, putting the group on track to fall well short of Musk’s initial $2 trillion goal.
Politicians have also been reluctant to legislate most of DOGE’s cuts. The Trump-endorsed One Big Beautiful Bill Act, currently in the U.S. Senate, only includes $9.4 billion of DOGE’s cuts, and would lift the country’s debt ceiling by a whopping $4 trillion. The Congressional Budget Office estimates that the bill would worsen the federal deficit to 7% of GDP by 2026.
It makes sense at this point to at least consider Bitcoin as part of a diversified investment portfolio to hedge against what could be years of outsize federal spending ahead.
The digital economy is coming
Trump aligned himself with Bitcoin (and other cryptocurrencies) while campaigning, and followed through with an executive order to establish a Strategic Bitcoin Reserve for the federal government. Trump’s well-known disdain for regulatory red tape could help facilitate innovation over the coming years.
At the same time, it appears that corporations are finding reasons to adopt digital currencies. Cryptocurrency exchange Coinbase Global has partnered with American Express to announce a credit card that offers cash-back rewards in Bitcoin. Amazon and Walmart have announced plans to create stablecoins, aiming to break free from traditional payment networks.
The broad shift toward a digital economy would be a rising tide that should directly benefit Bitcoin, as the most prominent cryptocurrency. The Grayscale Bitcoin Trust ETF is a simple way to invest in Bitcoin, making it a no-brainer today, given how the big picture is materializing in Bitcoin’s favor.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. American Express is an advertising partner of Motley Fool Money. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Bitcoin, and Walmart. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.