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Bitcoin or a Broad-Market ETF? The Answer Couldn’t Be Clearer for Long-Term Investors​
Business & Economy

Bitcoin or a Broad-Market ETF? The Answer Couldn’t Be Clearer for Long-Term Investors​


Cryptocurrency prices, including Bitcoin (CRYPTO: BTC), have been pummeled during the past few months as investors have rotated out of more speculative investments to safer ones. With the threat of tariffs rearing their ugly head again and investors concerned about how artificial intelligence (AI) might disrupt established companies and industries, desire to own digital currencies is on the wane.

The result is that Bitcoin has tumbled, and I think there’s a case for investors to put their money into a broad-market exchange-traded fund (ETF) right now. The Vanguard S&P 500 ETF (NYSEMKT: VOO) is my personal favorite. Here’s why it’s a better buy than Bitcoin this year.

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A person pointing to a chart.
Image source: Getty Images.

It wasn’t all that long ago that investors had a seemingly insatiable appetite for riskier investments. Consider that Bitcoin’s price reached its all-time high of more than $126,500 in October, before the recent crypto sell-off caused its price to plummet to about $69,000 as of this writing.

There isn’t one single factor that’s caused the retreat, but rather a general skepticism about some AI stocks, uncertainty about where the economy is headed amid geopolitical uncertainties, and President Donald Trump announcing new global tariffs of as much as 15% — just after the Supreme Court struck down his previous round of tariffs.

Additionally, layoffs in January were the highest in that month in 17 years, and the World Economic Forum said recently that 41% of global companies are expecting to reduce their staff during the next five years because of artificial intelligence.

Bitcoin had been on a tear in a post-COVID world where tech stocks were soaring, and initial AI optimism helped lift digital currency prices. But now some investors have the sense that economic winds might be shifting, and they have pared back on Bitcoin, along with many other cryptocurrencies and other speculative investments, including quantum computing stocks.

Bitcoin Price Chart
Source: YCharts.

While Bitcoin is down about 23% during the past year, the Vanguard S&P 500 ETF has been slowly and steadily climbing more than 16%.

The fund tracks the S&P 500, so if the market is doing well, the fund tends to perform well too. The benefit of having your money spread across the largest 500 publicly traded companies in the U.S. is that you have the potential to benefit from many areas of growth, including AI, healthcare, consumer spending, industrial production, and more.



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