Browsing through my portfolio of Stock funds yesterday, looking for opportunities for my monthly modest purchases, I quickly realized that we are going through a bullish spell and this might not be the right time to buy. Casting a wider net did not return any products that break that trend: Finance, Oil, Semi-conductors, Aerospace, Defence, Gold Mines, … are all on an mid-term high. Or did one asset break that trend in a very unexpected way? I’m talking about Bitcoin.

Bitcoin has been in my cross hairs for a very long time and 2016’s success spell has only added to my interest. With a return of around 170% between 01/01/2016 and 31/12/2016, what savvy invester did not take a look? Even though there seems to be serious momentum to the cryptcoin, two factors have stopped me time-and-again from investing:

• The purchase is awkward and complicated to say the least
• Holding your purchases requires using online services that I do not know (and yet, not trust), using an app on you cell phone or buying a contraption called a hardware wallet

Immediately after New Years Eve, Bitcoin’s exchange rate plummited but quickly picked up again. In my attempt to understand the dynamics, the reason for the digital currency catching its breath again made me realize that Bitcoin might be coming of age and becoming a serious option for Investment.

You see, another option for investment I was exploring are Electronically Traded Funds (ETFs). My personal preference for stock investments goes to Funds, as I do not have the time to monitor prices of shares continuously, nor am I an expert stock analyst. In my initial reasoning, I am paying the Fund Manager to keep an eye on my investment for me. Funds are benchmarked against their appropriate stock index. If you choose to invest in a Fund focussed on Health Care, the performance of the stock is usually compared MSCI World Health Care index (as shown below). As others have pointed out before, the average performance of most Equity Funds compared to these indexes does not warrant the additional cost associated with buying a Fund (i.e. the salary of the Fund Manager). In some cases it is more profitable to have a computer follow the exact composition of the Index, and have it buy/sell the stock that the index is composed of.

It turns out that the reason for Bitcoin’s bounce-back in January 2017 were the rumours that several parties have filed for approval with the American Securities and Exchange Commission (SEC) to launch ETFs based on Bitcoin. If this becomes reality, it would remove major roadblocks to investing and herald a new stage in Bitcoin’s mainstream acceptance.

Let’s keep an eye on it, and decide whether to invest in such an ETF or not.