Bitcoin is in a strong bull market at the moment. Over the last year, it has surged from $48,000 to $98,000. Looking ahead, many experts believe that the crypto-asset will keep rising due to increased interest from institutions and a more favourable regulatory environment. One well-known financial analyst has said that it could potentially hit $250,000 this year.
$250,000 in 2025?
The analyst I’m referring to is Tom Lee, who is Managing Partner and Head of Research at Fundstrat Global Advisors. In a recent interview on CNBC, Lee said that he believes Bitcoin will be one of the best-performing assets this year.
“Bitcoin could be significantly higher this year, maybe $200,000, maybe $250,000, so I think $90,000 is still a good entry point,” he told the ‘Squawk Box’ team.
However, Lee stressed that with this asset, investors need to be long-term focused due to its volatility. And he said that in the short term, it could fall back to $70,000 or even $50,000 (i.e. it could nearly halve in value).
It’s worth noting that Lee has been covering Bitcoin for many years now (since about 2018). He was the first major Wall Street strategist to provide formal research coverage of crypto-asset to clients.
Buying Bitcoin in the UK
If you’re looking to get some portfolio exposure to Bitcoin, you have several options in the UK.
One is to buy Bitcoin directly. This is relatively easy to do these days.
Today, there are several platforms available to UK investors that offer direct exposure to the crypto-asset. An example here is eToro.
With eToro, you do need to complete a short questionnaire before you can invest (to ensure you understand the risks). But once you’ve done this, you can get exposure to the digital asset in minutes.
Fees are 1% per trade (to both buy and sell), which is quite reasonable. But there are some other fees to be aware of such as FX fees and withdrawal fees.
Other options for buying Bitcoin directly include Coinbase and Revolut.
Can UK investors buy Bitcoin ETFs?
While Bitcoin ETFs are around today, they are not available to UK investors. This is because they are banned by the Financial Conduct Authority (FCA).
If they were available, they would offer a straightforward way of gaining exposure to the crypto-asset. Yet for now, they are not an option for UK investors.
A Bitcoin stock that can be held inside an ISA
However, there are other ways to get indirect exposure to Bitcoin in the UK.
One example here is Strategy (formerly MicroStrategy) stock (MSTR:NASDAQ). Strategy is a US tech company that is heavily focused on Bitcoin (it sees itself as the world’s first and largest Bitcoin Treasury Company) and holds a ton of the crypto-asset itself. Currently, it owns nearly 500,000 Bitcoins. So, if the price of the crypto-asset continues to rise, the company should become more valuable.
Now, this is a risky way to get exposure to the digital asset. Because the company is currently trading a significant premium to the value of its Bitcoin holdings.
But here’s the thing, this stock can be held inside a Stock and Shares ISA (or SIPP). So, any gains could potentially be tax-free. Hold Bitcoin outside an ISA or SIPP and you may be liable for Capital Gains Tax (CGT). And this could be significant.
Be aware of the risks
It’s worth stressing that Bitcoin is a very risky asset. In the past, it has fallen more than 50% on several occasions.
Given its volatility, experts advise not putting more than 1-2% of your portfolio into the asset. By keeping portfolio exposure small like this, one can potentially benefit from any gains while simultaneously minimising the risk of catastrophic losses.
If you are interested in buying Bitcoin in the UK, we have compared and reviewed the best Bitcoin trading platforms here.
Based in London, Edward is a distinguished investment writer with an extensive client portfolio comprising a diverse array of prominent financial services firms across the globe. With over 15 years of hands-on experience in private wealth management and institutional asset management, both in the UK and Australia, he possesses a profound understanding of the finance industry.
Before establishing himself as a writer, Edward earned a Commerce degree from the prestigious University of Melbourne. Complementing his academic background, he holds the esteemed Investment Management Certificate (IMC) and is a proud holder of the Chartered Financial Analyst (CFA) qualification.
Widely recognized as a sought-after investment expert, Edward’s insightful perspectives and analyses have been featured on sites such as BlackRock, Credit Suisse, WisdomTree, Motley Fool, eToro, and CMC Markets, among others.
You can contact Ed at edward@goodmoneyguide.com
