If You Loved Bitcoin At $126k Then You Should Love It Now
"Own Bitcoin Through The Largest Bitcoin ETF"
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Current Price: $38.29
Portfolio Purpose: Growth 📈
For full transparency, I recently opened a very small position in IBIT.
But for most of my investing life, I shared Warren Buffett’s skepticism.
Crypto lacks the traditional fundamentals I rely on—no cash flow, earnings, balance sheet, ROE, or valuation metrics. Price appreciation is largely driven by what the next buyer is willing to pay, making it inherently speculative.
Traditional stocks are different. Over time, share prices tend to follow earnings growth.
That said, despite my reservations, I believe crypto is here to stay—and Bitcoin (BTC-USD) will likely continue shaping the future of financial markets.
As a result, I recently added exposure during the current downturn, specifically through the iShares Bitcoin Trust ETF (IBIT).
Long term, I remain bullish on Bitcoin despite its extreme volatility. Rising demand, broader adoption, and institutional integration could drive new highs in the years ahead.
And after a sharp pullback, IBIT may offer a lower-risk way for long-term investors to gain exposure.
A Crypto Winter? 🥶
At the time of writing, Bitcoin trades near $67,507, down roughly 29% over the past year. IBIT, which holds 100% Bitcoin exposure, is down about 29% over the same period.
Since October 2025, Bitcoin has fallen from above $126,000 to new cycle lows. IBIT has followed suit, dropping from over $71 to roughly $38 per share.
Volatility is nothing new for crypto—and I don’t pretend to know where the bottom is. We could easily see Bitcoin dip below $60,000.
But price matters, and if you believe Bitcoin is here to stay, periods of pessimism often create better long-term entry points.
Personally, I prefer dollar-cost averaging into volatile assets to manage expectations and reduce timing risk. With crypto, that approach is essential.
Why the Sell-Off? 🧾
According to CNBC, the recent sell-off reflects waning investor interest. I believe part of that stems from uncertainty around monetary policy, including the President’s announcement of a new Fed chair.
If rate cuts accelerate, capital could rotate toward equities as yields on fixed-income investments fall—reducing demand for alternative inflation hedges like crypto.
That said, while retail investors are selling, institutions appear to be accumulating. State Street notes continued institutional interest driven by long-term growth expectations, diversification benefits, and regulatory progress.
Why IBIT? ₿
IBIT is designed for investors seeking direct Bitcoin exposure without holding crypto directly.
The fund pays no dividend—unusual for me—but I’ve become more open to owning non-income assets where growth potential justifies the risk. (Netflix (NFLX) is a recent example.)
Launched in January 2024, IBIT is now the largest spot Bitcoin ETF, with roughly $65 billion in assets under management. Larger funds typically offer better liquidity, tighter spreads, and more efficient trade execution.
IBIT holds a single asset: Bitcoin.
Unlike covered-call or hybrid ETFs, IBIT is built to outperform during Bitcoin bull markets—not to smooth volatility or generate income. It should be viewed strictly as a diversification and growth tool.
Another advantage is cost. IBIT’s 0.12% (due to prior waiver now 0.25%) expense ratio is meaningfully lower than many peers and significantly cheaper than crypto-linked covered-call funds that often charge close to 1%.
Valuation, NAV & Volatility ↕️
Since inception, IBIT has posted strong long-term NAV growth, though recent volatility has driven short-term declines. At current prices, the ETF trades at a notable discount to NAV—reflecting the sharp sell-off in Bitcoin itself.
However, investors should understand the risk: prolonged volatility or further downside in Bitcoin will pressure NAV and could lead to extended underperformance.
Taxes 💸
IBIT is taxed similarly to owning Bitcoin directly.
Hold shares for less than one year, and gains are taxed at short-term capital gains rates. Hold for more than one year, and gains are taxed at more favorable long-term rates, depending on your income bracket.
Risks ⚠️
IBIT’s biggest risk is volatility—plain and simple.
Large drawdowns are part of crypto investing, and this ETF is no exception. Further downside is possible, even below prior lows.
Bottom Line ✅
That said, IBIT benefits from scale, direct Bitcoin exposure, low fees, and backing from one of the world’s largest asset managers.
I don’t view this as a core holding. But for investors who remain bullish on Bitcoin and can tolerate volatility, IBIT may be a reasonable way to gain exposure. Especially, through disciplined dollar-cost averaging.
Do you think Bitcoin will recover? Is this a sign crypto is in trouble? Or just a healthy correction? Let me know in the comments.
Happy Investing!
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Not financial advice. For educational purposes only. I am not a licensed professional. Do your own due diligence.
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