SEC Nods to Bitcoin ETF: Caution Advised

Michael Mulcahy
Written By Michael Mulcahy, CFA®

On January 10, 2024, the U.S. Securities and Exchange Commission (SEC) has greenlighted Bitcoin ETFs, marking a significant turn in cryptocurrency investment.

Why It’s Significant:

  1. Historic Decision: This approval is a historic moment for cryptocurrency, showcasing its growing acceptance in mainstream finance.

  2. Investor Appeal: The ETF makes Bitcoin investment accessible to a broader audience, potentially increasing market participation.

  3. Risk and Responsibility: This new investment opportunity reminds us of the warning from 1 Corinthians 10:23 - “Everything is permissible, but not everything is beneficial.” Let this serve as a reminder that while investment opportunities expand, they don’t always align with individual goals or risk tolerance. Just because you can buy a product, doesn’t mean you should!

 Learn More:

  1. What is an ETF?: An Exchange-Traded Fund (ETF) is a type of security that tracks an index, sector, commodity, or other asset, but can be bought and sold on a stock exchange like a regular stock.

  2. What is new about this?: This ETF simplifies investing in Bitcoin, bypassing the complexities and security concerns of cryptocurrency exchanges. The ease of access means a broader range of investors are able to participate.

  3. What are some risks?: The volatile and ambiguous nature of Bitcoin poses significant risks. Investors should understand the potential for rapid price changes and the impact on their investment portfolio.

 What You Should Do:

  1. Don’t Invest without Understanding: Understand the basics of Bitcoin, blockchain technology, and how ETFs work.

  2. Assess Your Risk Tolerance: Reflect on your financial goals and how much risk you’re comfortable taking.

  3. Talk to us: Before diving in, seek advice from your advisors to see if this investment aligns with your strategy.

 Remember, just because you can, doesn’t always mean you should!

Learn More Here:

WSJ Online | SEC Approves Bitcoin ETFs for Everyday Investors

Michael Mulcahy, CFA®

Michael provides investment research and portfolio design to help clients set and achieve their financial goals. His investment research covers both public and private investments. Additionally, Michael assists clients with financial, philanthropic, and other special projects.

Michael has been at Kings Path since September 2018. Previously, he was a Senior Investment Analyst at Salient Partners where he researched investment opportunities in the high yield and leveraged credit space and assisted in the management of various value-oriented equity strategies. He also developed multiple valuation and bank compliance models throughout various corporate restructurings and capital market transactions.

While at Texas A&M University, he participated in the Business Honors program and Titans of Investing Program at Mays Business School and served on the executive team of Impact, a freshman orientation camp. Michael received his Bachelor’s degree in Business Honors and Finance from Texas A&M University, graduating cum laude. He is a CFA® charterholder.

Michael married his wonderful wife, Jordan, in the summer of 2019. Michael is a proud father of two daughters!

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Kings Path Partners, LLC (KPP) is an SEC-registered investment advisory business based in Sugar Land, Texas. KPP has published this article for informational purposes only. To the best of our knowledge, the material included in this article was gathered from sources KPP believes to be accurate and reliable. That noted, KPP cannot guarantee that this information is accurate and complete and cannot be held liable for any errors or omissions. Readers have the responsibility to independently confirm the information herein. KPP does not accept any liability for any loss or damage whatsoever caused in reliance upon such information. KPP provides this information with the understanding that it is not engaged in rendering legal, accounting, or tax services. In particular, none of this published material should be considered advice tailored to the needs of any specific investor. KPP recommends that all investors seek out the services of competent professionals in any of the aforementioned areas. With respect to the description of any investment strategies, simulations, or investment recommendations, KPP cannot provide any assurances that they will perform as expected and as described in this article. Past performance is not indicative of future results. Every investment program has the potential for loss as well as gain.

https://www.linkedin.com/in/michael-mulcahy-ii/
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