SEC Nods to Bitcoin ETF: Caution Advised

Michael Mulcahy
Written By Michael Mulcahy, CFA®, CPWA®

On January 10, 2024, the U.S. Securities and Exchange Commission (SEC) has greenlighted Bitcoin ETFs, marking a significant turn in cryptocurrency investment.

Why It’s Significant:

  1. Historic Decision: This approval is a historic moment for cryptocurrency, showcasing its growing acceptance in mainstream finance.

  2. Investor Appeal: The ETF makes Bitcoin investment accessible to a broader audience, potentially increasing market participation.

  3. Risk and Responsibility: This new investment opportunity reminds us of the warning from 1 Corinthians 10:23 - “Everything is permissible, but not everything is beneficial.” Let this serve as a reminder that while investment opportunities expand, they don’t always align with individual goals or risk tolerance. Just because you can buy a product, doesn’t mean you should!

 Learn More:

  1. What is an ETF?: An Exchange-Traded Fund (ETF) is a type of security that tracks an index, sector, commodity, or other asset, but can be bought and sold on a stock exchange like a regular stock.

  2. What is new about this?: This ETF simplifies investing in Bitcoin, bypassing the complexities and security concerns of cryptocurrency exchanges. The ease of access means a broader range of investors are able to participate.

  3. What are some risks?: The volatile and ambiguous nature of Bitcoin poses significant risks. Investors should understand the potential for rapid price changes and the impact on their investment portfolio.

 What You Should Do:

  1. Don’t Invest without Understanding: Understand the basics of Bitcoin, blockchain technology, and how ETFs work.

  2. Assess Your Risk Tolerance: Reflect on your financial goals and how much risk you’re comfortable taking.

  3. Talk to us: Before diving in, seek advice from your advisors to see if this investment aligns with your strategy.

 Remember, just because you can, doesn’t always mean you should!

Learn More Here:

WSJ Online | SEC Approves Bitcoin ETFs for Everyday Investors

Michael Mulcahy, CFA®, CPWA®

Michael serves as a Vice President of Kings Path where he provides portfolio design and planning services to help families and foundations achieve their financial and legacy goals. Michael has a passion for developing tax-saving investment and asset location strategies, consulting on the development of estate structures, building and communicating business succession plans and coordinating philanthropic projects for business owners and generous givers.

Prior to joining Kings Path, he was a Senior Investment Analyst at Salient Partners where he worked across different strategies including the following: leveraged credit, value-oriented US equities, covered call and long-short tech-sector. Additionally, Michael worked on special projects where he assisted with capital financing projects, strategic acquisitions, and business unit sales.

Michael received his bachelor’s degree in business honors and finance from Texas A&M University, graduating cum laude. He is a CFA® charterholder and a CPWA® professional through study at University of Chicago Booth School of business. He is a member of the Investments & Wealth Institute® and the CFA Society of Houston.

Michael serves on the board of Vision Inspired Foundation which he helped found in 2017. Happy to be back in his hometown, Michael lives in Sugar Land with his wife, Jordan and two daughters.

Send an email to Michael

Kings Path Partners, LLC (KPP) is an SEC-registered investment advisory business based in Sugar Land, Texas. KPP has published this article for informational purposes only. To the best of our knowledge, the material included in this article was gathered from sources KPP believes to be accurate and reliable. That noted, KPP cannot guarantee that this information is accurate and complete and cannot be held liable for any errors or omissions. Readers have the responsibility to independently confirm the information herein. KPP does not accept any liability for any loss or damage whatsoever caused in reliance upon such information. KPP provides this information with the understanding that it is not engaged in rendering legal, accounting, or tax services. In particular, none of this published material should be considered advice tailored to the needs of any specific investor. KPP recommends that all investors seek out the services of competent professionals in any of the aforementioned areas. With respect to the description of any investment strategies, simulations, or investment recommendations, KPP cannot provide any assurances that they will perform as expected and as described in this article. Past performance is not indicative of future results. Every investment program has the potential for loss as well as gain.

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