Rephrase and rearrange the whole content into a news article of 350 words. Make sure whole content is in narrative style with h2 and h3 headings and there is no plagiarism involved compare with the following article: Cryptocurrency is one of the most polarizing assets in the capital markets. It seems like investors either love it or hate it, with virtually no in-between.Crypto is undoubtedly a speculative investment class, and many tokens trade with pronounced volatility, but in January, the Securities and Exchange Commission (SEC) gave the nod to a new way to participate in crypto investing that might attract those who are wary of investing in the tokens themselves.Several institutional money managers were granted approval to sell spot Bitcoin exchange-traded funds (ETFs). In essence, these vehicles are meant to track the price of Bitcoin (CRYPTO: BTC) without requiring investors to outright own the coin itself.Although these passive funds are nascent, there are some intriguing reasons why they may be worthwhile over the long term.What is Bitcoin?Bitcoin is regarded to be the first cryptocurrency. It is decentralized — meaning that it does not trade on a major exchange nor is it regulated to the same degree as other vehicles such as stocks.One of the more interesting features of Bitcoin is that there is a finite amount of the token in circulation. This aspect adds some allure to the crypto — so much so that some refer to Bitcoin as digital gold.Image source: Getty Images.Investors look beyond stocks when things get rockyAlternative assets such as real estate or even art can serve as a hedge to traditional investments in stocks or bonds when the macroeconomic picture looks cloudy. Commodities like precious metals — including gold — can also fall into this category and, generally speaking, the asset tends to enjoy more attention and price action during times of heightened economic instability. Some investors flock to gold as it represents a safe haven as compared to stocks or bonds during times of market instability.Two of the most popular gold ETFs are SPDR Gold Shares and iShares Gold Trust. Each of these funds provides investors with direct exposure to gold.Story continuesThe chart below illustrates the growth of a hypothetical $10,000 investment in each of these ETFs versus the same amount in the Vanguard S&P 500 ETF.IAU Total Return Level ChartThe chart above paints an interesting picture. Over the past decade, the gold ETFs generated fairly steady, respectable returns. However, an investment in a fund tracking the S&P 500 was clearly the superior option. Perhaps more intriguing is the pronounced growth the gold ETFs saw since 2020.IAU ChartThe chart above shows an initial drop in the S&P 500 fund during the early portion of 2020 — coinciding with the start of the COVID-19 pandemic. And while the stock market has clearly done well over the last few years, the returns were far less consistent than those of the gold ETFs. This dynamic can be seen in the S&P 500 fund’s extended gain from 2020 to 2021, followed by a precipitous decline in 2022. While the gold ETFs had similar movements, they were far less dramatic than that of the broader markets. That stability is appealing to some investors.Different than gold, but worth a lookI see the spot Bitcoin ETFs as a similar mechanism to the gold ETFs. However, I’d argue that Bitcoin is far more speculative than gold and therefore ETFs tracking it could experience more dramatic ebbs and flows.Moreover, gold ETFs have been around for a long time and have many years of historical trading data. While past performance does not guarantee future results, it’s at least worth analyzing historical trends to get a sense of where certain funds and assets could be headed. Spot Bitcoin ETFs are extremely new, and the jury is still out on whether these products will provide investors with steady returns over a long time horizon.I think crypto will eventually become more mainstream, with Bitcoin and other tokens being increasingly accepted as a form of payment. Should this be the case, it’s possible that crypto will garner more interest from a broader base of investors.Although gold and Bitcoin carry very different investment prospects, the overlapping feature of each asset having a limited supply and being viewed as a safe haven during turbulent economic times could make an investment in these Bitcoin spot ETFs an interesting option for those looking to broaden their portfolio.Should you invest $1,000 in Bitcoin right now?Before you buy stock in Bitcoin, consider this:The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bitcoin wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.See the 10 stocks*Stock Advisor returns as of February 5, 2024Adam Spatacco has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.Do Gold ETFs Have Any Lessons for Those Interested in Spot Bitcoin ETFs? was originally published by The Motley Fool
I have been writing about crypto for over two years. I have a vast amount of experience in the industry and my work has been featured on some of the biggest publications in the space.
