A Safe Way to Play the Bitcoin ETF Rumors

Bitcoin is having a strong year. Rumors of an ETF approval are helping to push the crypto’s price higher, even if the actual news hasn’t materialized yet.

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  • Chances are investors will continue to see big daily volatility in cryptos like bitcoin for some time. Those looking to play the overall rising trend in the space can find less volatile places to play it. That means ignoring companies with heavy bitcoin exposure, such as bitcoin mining companies.

    Cryptocurrency brokerages could benefit from the rising trend, particularly Coinbase (COIN). The industry leader is the custodian of choice for many companies that have filed for a bitcoin ETF.

    That could help the broker see its revenues soar back to bull market levels and beyond – and quickly.

    Coinbase is still struggling with profitability amid the latest crypto bear market. And revenues are down 17 percent compared to last year as investors have focused on buying and holding rather than trading.

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  • Action to take: The crypto winter is starting to warm up, and Coinbase is starting to pop higher on the bitcoin ETF news. That points to a possible big rally for shares in the months ahead. Investors amy want to buy shares as a way to play that trend.

    For traders, the March 2024 $110 calls, last going for about $8.00 could see mid-double-digit gains on a normal rally. They could surge further on the approval of a bitcoin ETF, which would likely send crypto prices soaring.

     

    Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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