Bitcoin (BTC), is buying 'spot' the answer instead of income-generating products?..."Up to 400% increase opened up"

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A claim has emerged that buying spot Bitcoin (BTC) is more advantageous than Wall Street-style income-generating products when investing in Bitcoin.

Cryptocurrency-specialized YouTube channel MoneyZG stated in a video uploaded on June 19 (local time) that Bitcoin is in the best risk-reward zone for long-term investors. The presenter predicted that Bitcoin could rise by 200-300% within a few years if it enters a bull market. For a 5-7 year period, he suggested a potential return of 300-400%. He said, “There’s no reason to buy a 13% income-generating product when Bitcoin is at its 200-week moving average.”

The video strongly criticized income-generating products like STRC and SATA. The presenter viewed STRC as a niche product with the characteristics of preferred stock, released by Strategy. He explained that it's not a core part of a portfolio but rather an auxiliary product at the 1-2% level. He also pointed out that describing STRC like a bank account or money market fund is inappropriate.

The rapid decline of STRC was attributed to fund movements to SATA. SATA offered higher returns and a daily dividend structure. This led some investors to move from STRC to SATA. The presenter explained that this process resulted in liquidation selling and a concomitant downturn. He emphasized that preferred stock products are inherently volatile and not stable cash products.

BlackRock (BLK)'s Bitcoin income product was also criticized in the same context. The video explained that this product uses a covered call strategy similar to JP Morgan (JPM)'s JEPI and JEPQ. The structure involves the asset manager holding Bitcoin and selling call options to receive option premiums. Investors can receive monthly distributions, but they forgo some of the upside when Bitcoin rises significantly.

The presenter suggested that for young investors or those with a 5-7 year investment horizon, spot Bitcoin is better than income-generating products. He pointed out that a distribution-receiving structure can create tax issues. In contrast, he emphasized that capital gains tax does not occur on spot holdings until they are sold. He explained that NASDAQ has risen 33% over the past 12 months and has a long-term average annual return of about 18%. Nevertheless, he assessed that Bitcoin's risk-reward, despite being in a bear market, is more attractive.

Meanwhile, MoneyZG believes that Bitcoin's 4-year cycle is not yet over. The current cycle is at approximately 800 days, and historically, a recovery trend appeared around the 950-day mark. The fact that about 89% of circulating Bitcoin is not moving was also presented as a typical sign of the late stages of a bear market. The presenter concluded that while the bear market might last longer, a strategy of accumulating spot Bitcoin through dollar-cost averaging is key.

*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*