Summary Bitcoin has experienced significant price volatility over the past decade, reaching highs of over $73,660 per token. Events such as scandals, high-profile investors, and the approval of spot Bitcoin ETFs have contributed to Bitcoin's price surges. Cryptocurrencies remain a small asset class compared to traditional markets, with Bitcoin's market cap at over $1.275 trillion. EZBC is a spot Bitcoin ETF Product with the lowest expense ratio. Bitcoin began trading around 2010, and the leading cryptocurrency has experienced boom-and-bust price action for nearly a decade and a half. The ascent from five cents in 2010 to over $73,660 per token has been astounding. However, the ride higher has been more than bumpy as parabolic rallies have often led to shocking plunges, shaking the faith of even the most devoted crypto proponents. Meanwhile, events have caused the most extreme rallies and corrections. Scandals from the Mount Gox hack and bankruptcy to the FTX failure were responsible for significant declines. Futures on the CME, high-profile investors, and spot Bitcoin ETFs have increased the token's price to new highs. At over the $64,500 level on June 18, Bitcoin's market cap was over $1.275 trillion, representing nearly 55% of the cryptocurrency asset class's total $2.32 trillion market cap. Bitcoin was worth more than double the second-leading cryptocurrency, Ethereum. Moreover, only three cryptos, Bitcoin, Ethereum, and Tether, had a total value of over $100 billion. At $2.32 trillion, cryptocurrencies remain a small asset class compared to stocks, bonds, currencies, and the leading commodity markets. However, the asset class and its leader continue to experience boom-and-bust price action, leading speculators and investors to flock to cryptos. Extreme price volatility creates a paradise of opportunities for nimble traders with their fingers on the pulse of markets. Cryptos offer substantial rewards for trend-followers and speculators, but the potential for significant profits always comes with commensurate risks. In 2024, the U.S. SEC approved spot Bitcoin ETF products, increasing the crypto's addressable market. The Franklin Bitcoin ETF ( EZBC ) is a spot Bitcoin ETF. While there are many choices in the spot Bitcoin arena and the ETFs that hold the leading crypto display identical performance, EZBC's expense ratio or management fee makes it one of the most attractive. Bitcoin - New high and a correction The monthly chart reflects Bitcoin's boom-and-bust price action over the past fourteen years. Long-Term Bitcoin Chart Since 2010 (Barchart) The chart shows the pattern of higher lows and higher highs in the volatile leading cryptocurrency. The latest March 2024 record high took Bitcoin to $73,662.76 per token. New highs have led to significant corrections, and Bitcoin tumbled 23% to a $56,668.48 low in May 2024. After the most recent correction reached at least a temporary bottom, Bitcoin has been consolidating. Six-Month Bitcoin Chart (Barchart) The six-month chart highlights the sideways trading pattern since the March high and the May low. An alternative currency in a changing world for foreign exchange Bitcoin is a means of exchange, a decentralized digital currency that market participants can buy, sell, and directly exchange with an intermediary, a function that banks serve in traditional currency markets. The U.S. dollar has been the world's reserve currency for decades, but times are changing. In early 2022, President Xi of China shook hands with President Putin of Russia, beginning a " no-limits " alliance. Less than one month later, Russian troops invaded Ukraine, launching a war that continues. China has stated its plans for reunification with Taiwan. Relations between the U.S. and Moscow/Beijing have deteriorated. Sanctions, tariffs, and other trade barriers have caused the dollar's status as the world's reserve currency to diminish. In 2024, Saudi Arabia ended a fifty-year petrodollar agreement and is now selling petroleum for payment in non-dollar currencies. The potential for a BRICS currency with gold backing is rising. The bottom line is the dollar's retreat in the global financial arena has supported alternative means of exchange. Bitcoin and other cryptocurrencies without borders or government intervention have gained acceptance. Bitcoin's rise has further sparked speculative and trend-following activities, with many investors allocating a percentage of portfolios to the cryptocurrency asset class. Bitcoin's role as a global foreign exchange transcending borders is one of the most attractive aspects of the leading crypto. Moreover, the technology that underpins Bitcoin, Ethereum, and thousands of other digital currencies has revolutionized bookkeeping and transaction times, changing the international finance landscape by bringing it into the modern technological era. The risk if the market cap grows to over $3 trillion At $2.32 trillion, cryptocurrencies remain a small asset class. The market caps of the leading U.S. stocks are higher than the entire digital currency asset class. Largest Companies by Market Cap (Source: Companies ranked by Market Cap - CompaniesMarketCap.com) The chart shows that NVIDIA Corporation (NVDA), Microsoft Corporation (MSFT), and Apple Inc. ( AAPL ) have market caps higher than the total cryptocurrency asset class. Moreover, those companies, along with Alphabet Inc. (GOOG), (GOOGL), Amazon.com, Inc. (AMZN), and Saudi Aramco, have market caps higher than Bitcoin, while the leading crypto's market cap is around the same level as Meta Platforms, Inc. (META). The bottom line is that cryptos remain small when compared to stocks, bonds, commodities, real estate, and other traditional asset classes. The high watermark in market cap for cryptos was just over the $3 trillion level, which could be a line in the sand for U.S. and other international legislators and regulators. As governments derive power from control of purse strings, if cryptos move to levels that push the market cap significantly over the $3 trillion level that threatens existing fiat currencies, we could see increased regulations and legislative efforts to curtail or even ban the cryptos. The higher they rise over the coming months and years, the greater the odds of intervention, which could cause significant volatility. EZBC - A spot Bitcoin ETF Bitcoin's latest rally occurred after the U.S. SEC approved spot Bitcoin ETFs, increasing the cryptocurrency's addressable market. As investors, traders, and other market participants now have an alternative to holding cryptos in computer wallets and on digital currency exchanges, they have become more comfortable owning the assets. One of the new spot Bitcoin ETFs is the Franklin Bitcoin ETF ((EZBC)). EZBC's fund profile states: Fund Profile for the EZBC ETF Product (Seeking Alpha) EZBC's top holdings include: Top Holdings of the EZBC ETF Product (Seeking Alpha) As the chart shows, EZBC holds 100% of its assets under management in Bitcoin. At $37.55 per share, EZBC had $410.47 million in assets under management. EZBC trades an average of nearly 150,000 shares daily and charges a 0.19% management fee. Perhaps the most significant advantage for EZBC is the ETF's cost or expense ratio. At 0.19% it is below many of its peers : BTCW charges 0.25% . BRRR has a 0.25% management fee. BTCO's expense ratio is 0.25% . HODL charges 0.20% . BITB's management fee is 0.20% . IBIT charges 0.25% . GBTC's expense ratio is 1.50%. Since all the leading spot Bitcoin ETF products hold their assets in physical Bitcoin, EZBC's lowest expense ratio makes it attractive. A good track record of replicating the price action over the past months EZBC reached a $42.75 high on March 13, the day before Bitcoin rallied to its record $73,662.76 high. Bitcoin fell 23% to a $56,668.48 low on May 1. At the $64,640 level on June 18, Bitcoin was 14% higher than the May 1 bottom. Chart of the Price Action in the EZBC ETF Product (Barchart) EZBC fell 23.2% from $42.75 on March 14 to $32.81 on May 1 and rallied 14.4% to $37.55 on June 18 as the ETF did an excellent job tracking spot Bitcoin prices. One drawback is that Bitcoin trades around the clock, while EZBC is only available during U.S. stock market hours. EZBC can miss highs or lows when the stock market is not operating. Bitcoin is consolidating and awaiting the next event that could cause another boom-or-bust move. While it may only be a matter of time before Bitcoin reaches new heights, governments could be the most critical factor in leading the crypto's path of least resistance. Controlling the money supply is a power they will not easily surrender.
