Overcome Crypto Investment Hesitation with a Simple, Budget-Friendly Strategy.
If you’re looking to dip your toes into the cryptocurrency world with just $100, the high prices of some popular coins might seem daunting. For instance, a single Bitcoin (BTC 0.30%) is currently valued around $111,000, while Ethereum (ETH 0.10%) trades at approximately $4,500.
So, how can you make the most of your $100 investment? Instead of gambling on volatile meme coins with negligible values, consider a more strategic approach. Here’s how to enter the crypto market without breaking the bank.
Selecting the Appropriate Cryptocurrency
While the cryptocurrency landscape boasts thousands of options, Bitcoin stands out, representing nearly 60% of the entire crypto market’s total value. It’s wise to start your crypto investment journey by considering Bitcoin.
Bitcoin remains the leading cryptocurrency, setting the standard for others. It’s typically the first crypto investment for both individual and institutional investors.
Image source: Getty Images.
Bitcoin’s popularity stems from its remarkable history of success. For a large portion of the last decade, Bitcoin has consistently outperformed other assets globally. Consequently, its price has surged dramatically, from $10,000 in 2017 to over $111,000 today.
Bitcoin ETFs: An Accessible Option
While you could directly purchase $100 worth of Bitcoin on a major crypto exchange and own a fraction (0.0009 BTC) of a coin, there’s a more practical alternative.
Consider investing in shares of the newly available spot crypto exchange-traded funds (ETFs) for Bitcoin. These ETFs provide a straightforward, convenient, and affordable means of gaining exposure to Bitcoin.
In fact, with less than $100, you can acquire a full share of many spot Bitcoin ETFs. For example, the widely recognized iShares Bitcoin Trust (IBIT 1.64%) trades around $63. Alternatives include the Fidelity Wise Origin Bitcoin Fund (FBTC 1.64%) at $97 per share, or the Ark 21 Shares Bitcoin ETF (ARKB 1.67%), priced at only $37.
The choice is yours. Price differences reflect the amount of Bitcoin held by each ETF and the number of shares issued. Investing $100 in three shares of Ark 21 Shares Bitcoin ETF or one share of Fidelity Wise Origin Bitcoin Fund provides approximately the same level of Bitcoin exposure.
Expense ratios are similar across these spot Bitcoin ETFs, meaning cost shouldn’t be a primary factor in your decision. For example, the iShares Bitcoin Trust and the Fidelity Wise Origin Bitcoin Fund both have an expense ratio of 0.25%, while the Ark 21 Shares Bitcoin ETF has a slightly lower expense ratio of 0.21%.
Spot ETFs Mirror Bitcoin’s Performance
Given Bitcoin’s impressive performance over the past decade, it’s crucial that spot crypto ETFs accurately reflect Bitcoin’s price movements. If Bitcoin’s value increases by over 100% in a year (as it did in both 2023 and 2024), your ETF investment should experience a comparable gain.
Bitcoin / U.S. dollar chart by TradingView
As illustrated in the TradingView chart, leading spot Bitcoin ETFs effectively track Bitcoin’s price. This is their key advantage: providing direct Bitcoin exposure through a readily tradable investment vehicle. This allows investors to participate in Bitcoin’s growth without the complexities of direct crypto ownership.
Optimizing Your Bitcoin Allocation
ETFs offer another benefit: they simplify portfolio allocation management for Bitcoin exposure.
For instance, if your total investment portfolio is worth $10,000, allocating $100 to Bitcoin ETFs would represent approximately 1% exposure to crypto.
If you believe this allocation is insufficient, you can increase your Bitcoin investment accordingly. Conversely, if you feel the initial allocation is too high, you can easily reduce your purchase.
Adopt a Long-Term “Buy and Hold” Strategy
Overall, Bitcoin remains a premier cryptocurrency for long-term investment. Analysts project Bitcoin could reach $1 million within five years, making it an opportune time to begin investing.
With $100 available, gaining exposure to Bitcoin now is a worthwhile consideration before potential price increases. In the long run, this investment could prove to be one of your most successful endeavors.