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▲ Virtual Asset Trading
A claim has emerged that investing in Bitcoin (BTC) through spot purchases is more advantageous than Wall Street-style income-generating products.
Crypto-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 believes that Bitcoin could rise by 200-300% within a few years if it enters a bull market. For a 5-7 year period, a 300-400% return potential was also suggested. He said, “There is 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 preferred stock characteristics offered by Strategy. He explained that it's not a core part of a portfolio but rather an auxiliary product at a 1-2% level. He also pointed out that describing STRC like a bank account or money market fund is inappropriate.
The sharp decline of STRC was attributed to fund movements to SATA. SATA offered higher returns and a daily dividend structure. Due to this, some investors moved from STRC to SATA, according to the analysis. The presenter explained that liquidating sales and a concomitant bearish trend occurred during this process. He emphasized that preferred stock products are inherently volatile and are not stable cash products.
BlackRock's (BLK) 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's (JPM) JEPI and JEPQ. It's a structure where the asset manager holds Bitcoin and sells call options to receive option premiums. Investors can receive monthly distributions, but they forgo some of the upside when Bitcoin rises significantly.
The presenter believed 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 the distribution-receiving structure can create tax issues. In contrast, he emphasized that capital gains tax does not occur on spot assets until they are sold. He explained that NASDAQ has risen 33% over the past 12 months, and its long-term average annual return is about 18%. Nevertheless, he assessed that Bitcoin's risk-reward, despite being in a bear market, is more attractive.
Meanwhile, MoneyZG also believes that Bitcoin's 4-year cycle is not yet over. The current cycle is at approximately the 800-day mark, and in the past, a recovery trend appeared around the 950-day mark. The fact that approximately 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 could lengthen, 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 any investment losses based on it. The content should be interpreted for informational purposes only.*
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