Bitcoin
You May Regret Skipping This Little-Known ETF That Combines the Power of the S&P 500 and Bitcoin
Want to give your portfolio a boost? Look no further.
History has shown that one of the simplest ways for investors to consistently give their portfolio the best the market has to offer is by investing in the S&P 500 (^GSPC -0.66%). Composed of the top 500 companies in the US, the S&P 500 delivered an average return of 10% per year over the long term.
An average return of 10% – which includes boom and bust years – is nothing to sneeze at, but for a growth investor with a long time horizon (and a greater appetite for risk), there are better opportunities in the market. This often means investing in riskier stocks, including technology companies at the forefront of innovation, as they have remarkable long-term potential. However, there is another asset that is proving to be a valuable addition to portfolios: Bitcoin (Bitcoin 1.57%).
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The Bitcoin Effect
Over the past five years, Bitcoin has risen more than 675%. Zooming out further, the cryptocurrency rose much higher. The reason behind Bitcoin’s massive appreciation is subtle, but what’s important to note is that it still holds a lot of potential to continue growing.
While blockchain and cryptocurrencies have significant potential to transform financial markets, most of the crypto asset class is rife with speculation. For several reasons, Bitcoin is the safest investment one can make when it comes to crypto. The crypto market is worth $2.57 trillion and Bitcoin represents more than 50% of that value. What this means is that as Bitcoin advances, so does the rest of crypto.
This makes it a great proxy for investors to gain exposure to the growing potential that crypto holds without having to pick individual winners like investing in the S&P 500.
Now, what if investors could invest in Bitcoin and the S&P 500 through one convenient commercial fund exchange (ETF)? Enter the Bitcoin Cyber Hornet Strategy ETF (ZZZ 0.77%) from OneFund.
What makes this ETF unique
This ETF is unique. It allocates 75% to the S&P 500 and the remaining 25% to Bitcoin futures contracts. Debuting in December 2023, over the past six months it has returned a generous 20%, with Bitcoin and the S&P 500 near all-time highs.
The beauty of the Cyber Hornet ETF is in its simplicity. By adding this ETF to your portfolio, you will gain exposure to the most valuable cryptocurrency on the market and with it, the gains that only Bitcoin is capable of providing. Additionally, investors place their money across the S&P 500 and large companies, including Microsoft, Nvidia, Litterand many other well-known names.
The most significant advantage this ETF offers is the combination of old and new. The 75% dedicated to the S&P 500 acts as a buffer to the volatility and significant dips that have historically plagued Bitcoin every four years or so. While a 25% allocation to Bitcoin gives investors the chance for growth.
Consider 2022, for example. During this period, Bitcoin and its futures contracts fell more than 65%, while the S&P 500 fell 19%. Although the Cyber Hornet ETF was not trading at the time, it would have fallen about 30% given its allocation. Don’t get me wrong, a 30% decline is not ideal, but this example shows how investors are protected from Bitcoin’s worst corrections due to ETFs’ unique allocation strategy.
Now, on the contrary, in 2023 the S&P 500 grew 24%. Again, although it was not traded, the Cyber Hornet ETF would have shown its true power by returning a commendable 59%, driven mainly by the resurgence of Bitcoin and the recovery in Bitcoin futures contracts, which grew by around 165%.
This Bitcoin/S&P 500 ETF might be right for you if…
Perhaps you have already heard about Bitcoin’s ability to increase significantly in a short space of time or heard about the recent approval of the spot Bitcoin ETFs, but they are still afraid to take the plunge. Maybe you’re not sure how to buy Bitcoin on a cryptocurrency exchange or how to operate a digital wallet.
If that’s the case, but you’ve done your research and believe in Bitcoin’s long-term potential, the Cyber Hornet ETF may be right for you.
Now it should be very clear that this ETF is not intended for an investor close to retirement, who does not have much time to recover losses. While Bitcoin has proven its ability to generate substantial returns, a byproduct of its finite supply and growing adoption, it is not without corrections.
For those who have some time on their hands, the Cyber Hornet ETF offers a balance that few other ETFs can offer – a mix between the best of crypto and the best that the traditional stock market has to offer. Your money could benefit from Bitcoin’s long-term trajectory while being protected from the high volatility that so often occurs when investing in cryptocurrencies.
RJ Fulton has positions in Bitcoin. The Motley Fool has positions and recommends Apple, Bitcoin, Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The motley fool has a disclosure policy.