Bitcoin Rules for Now, but the Crypto Landscape Is Vast
Investors want more than just a bit of bitcoin.
Spot Bitcoin ETFs amassed inflows of nearly $9.6 billion from April 21 through May 27, according to data compiled by Morningstar Direct. With the price of the world's most popular cryptocurrency reaching all-time highs of more than $100,000 lately and the Trump administration championing digital assets, advisors might now want to expand their focus beyond just bitcoin.
'The capitalization of the crypto space right now is more than $3 trillion. How can you ignore that?' said Campbell Harver, Duke University professor and partner at Research Affiliates. 'It'd be like ignoring a couple of companies in the Magnificent Seven.'
READ ALSO: RIA Headcount, AUM Shattered Records in 2024 and Bitcoin's Record Rally Prompts Advisors to Take a Second Look
While spot Bitcoin ETFs have been seeing plenty of momentum lately, iShares Bitcoin Trust ETF (IBIT) is the real winner. Over roughly the past five weeks, IBIT has taken in $8.7 billion, per Morningstar. That's about 80% of its total inflows year-to-date. Bitcoin and ETFs that track it may be a new corner of portfolios, but advisors are quickly growing more comfortable with it. 'Most of my clients have a 5-10% allocation to Bitcoin,' said Mike Casey, founder of AE Advisors. 'Some are allocated significantly higher.'
Bitcoin and IBIT are clearly the biggest players in the space, but advisors should have a wider view when considering crypto allocations, Harvey said, recommending wealth managers consider stablecoins — digital currencies pegged to traditional assets like the US dollar or gold. 'In my vision of the future, almost all assets will be tokenized — stocks, debts, mortgages, all this stuff,' he told Advisor Upside. 'We're going in that direction, and stablecoins are the first step.'
But of course, stay away from meme coins. 'They have no fundamental value whatsoever,' Harvey said. 'They're like trading cards.'
Golden Hour. Amidst the current economic uncertainty, some have begun viewing Bitcoin as a safe haven similar to gold, but that's still debated territory, given that their volatility profiles are drastically different, said Joy Yang, head of product management at MarketVector Indexes. 'Gold is more of a slow and steady type of asset and has been quietly outperforming US equities over the past 20 years,' she told Advisor Upside. 'Bitcoin has done it, too, but in a much more rollercoaster type of movement.'
In the same five-week span, Gold ETFs have experienced almost $2.8 billion in outflows, with State Street's SPDR Gold Shares (GLD) accounting for nearly all of that, according to Morningstar. The precious metal's price per ounce is down from an all-time high of $3,500 in late April. However, gold is still outperforming Bitcoin, up 28% YTD compared with Bitcoin's 12% as of Monday.
'Bitcoin is still a teenager,' Yang said. 'It'll eventually be an adult, but it's going to take a winding path to get there.'
This post first appeared on The Daily Upside. To receive financial advisor news, market insights, and practice management essentials, subscribe to our free Advisor Upside newsletter.
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Could Musk-Trump feud stoke GOP divisions ahead of midterms? ANALYSIS
Even by the standards of President Donald Trump and billionaire Elon Musk's relationship -- an unprecedented alliance punctuated by a meme-inspired reshaping of the government, numerous rocket launches, assassination attempts, a quarter-billion-dollar political gamble and electric car photo-ops -- it's been an unusual week. For months, Musk had been the closest of Trump's advisers -- even living at his Mar-a-Lago estate in Florida and spending time with the president's family. More recently, Trump gave Musk a congratulatory Oval Office sendoff from his work leading cost-cutting efforts in his administration, giving him a golden key with a White House insignia. But the billionaire's muted criticisms of Trump's "big, beautiful bill" grew louder and more pointed, culminating in posts Thursday on his social media platform taking credit for Trump's November win and Republicans' takeover of the Senate. "Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate," Musk posted. "Such ingratitude." Some lawmakers and Republicans worry Musk's apparent acrimonious departure from Trump's orbit could create new uncertainties for the party -- and stoke GOP divisions that would not serve Republicans well heading into a critical legislative stretch before the midterm elections. The back-and-forth attacks, which continued into the weekend and took a sharply personal turn, reverberated across a capital they have both reshaped. Trump on Friday told several reporters over the phone that he was not thinking about Musk and told ABC News Chief Washington Correspondent Jonathan Karl that Musk had "lost his mind." In the near term, Trump and the GOP are trying to muscle their signature tax and domestic policy megabill through the House and Senate, with the slimmest of margins and no shortage of disagreements. Any shift on the key issues could topple the high-wire act needed to please House and Senate Republicans. A nonstop torrent of criticism from Musk's social media megaphone could collapse negotiations, harden the position of the bill's critics and even undermine other pieces of Trump's first-term agenda. "You hate seeing division and chaos," Rep. Don Bacon, R-Neb., who represents a swing district, told ABC News about the Trump-Musk fracas. "It's not helpful." Rep. Jodey Arrington, R-Texas, the chairman of the House Budget Committee, called Musk a "credible voice" on "debt and spending" issues. "It's never helpful when he says those things. He's a believable person and he has a broad reach, but I think he's frustrated and people understand the context," Arrington said, predicting that both men will eventually resolve their dispute. Republican operatives watching the spat unfold this week told ABC News it is too early to say how the feud between Trump and Musk could affect the next election. The billionaire spent more than anyone else on the last election, pouring $270 million into groups boosting Trump and other Republicans up and down the ballot, according to Federal Election Commission filings. He already suggested he would cut back on his political donations next cycle, more than a year out from the midterm elections. In the final stretch of the 2024 race, he relocated to Pennsylvania, hosting town halls and bankrolling his own get-out-the-vote effort in the critical swing state. Since his foray into Washington, Musk has become a deeply polarizing and unpopular figure, while the president's approval rating has ticked up in some recent surveys. Groups affiliated with Musk spent $20 million this spring on the Wisconsin Supreme Court race, only for the liberal candidate to win -- signaling to some Republicans the limits of Musk's political pull. While his support may be missed by Republicans next cycle, Trump has continued to raise millions of dollars to support his future political plans, a remarkable sum for a term-limited president that underscores his central role in the party and undisputed kingmaker status. Rep. Mike Lawler, R-N.Y., who is mulling a gubernatorial bid in 2026, downplayed the tensions or political implications, suggesting that reporters "spend way more time worrying about these things than most average people." "I'm sure they will make peace," Lawler told ABC News on Friday. There were some signs of a détente. While Musk continued to hurl insults at Trump ally and critic Steve Bannon, his social media activity appeared to cool off on Friday, and the billionaire said one supporter was "not wrong" for saying Trump and Musk are "much stronger together than apart." Through nearly a decade in politics and three campaigns for the White House, Trump has demonstrated a remarkable ability to move past disputes or disagreements with many intraparty rivals and onetime critics, including some who now serve in his Cabinet. Now, some Republicans left Washington this week asking themselves if Musk is willing to do the same.
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an hour ago
- The Hill
Why Musk's feud with Trump could jeopardize his business empire
Elon Musk, the world's richest man, may have made himself an enemy of the world's most powerful leader. The public blowout between Musk and President Trump is threatening the tech billionaire's businesses, some of which have billions of dollars' worth of federal contracts. Musk's aerospace company SpaceX alone reportedly has at least $22 billion in federal contracts — which Trump had threatened to revoke at the peak of his feud with his former adviser. 'Trump goes after people, companies and organizations he doesn't like,' said Peter Loge, a professor at George Washington University and former senior FDA adviser during the Obama administration. 'As a real estate developer, politician and president, he has used every tool at his disposal to punish people he thinks have wronged him,' Loge added. 'Unless Musk expresses contrition, Trump is likely to hurt him in every way he can think of. If Musk is contrite, he can be welcomed back into the Trump tent.' While the two could reconcile in the future, observers agree the dramatic turn of events leaves Musk's business empire vulnerable to Trump's wrath. Trump, at one point during Thursday's back-and-forth, threatened to cut Musk's government contracts as he called his former adviser 'crazy.' 'The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon's Governmental Subsidies and Contracts. I was always surprised that Biden didn't do it!' Trump wrote in a Truth Social post. Musk, in turn, said he would decommission SpaceX's Dragon spacecraft, which is responsible for ferrying astronauts and cargo to and from the International Space Station. He later backed off, after an X user urged him to 'cool off and take a step back.' The exchange underscored how Musk's business ventures could get caught in the crosshairs of any feud with the president, who is known to have a proclivity for retribution. 'If this turns into a hot war, certainly, the consequences for Musk's business relationship with the federal government could be in peril, or at least significantly complicated,' said GOP strategist and Trump campaign alum Brian Seitchik. The tech billionaire officially departed the White House last week after a four-month stint in government in which he seemed to rarely leave Trump's side, becoming a near constant presence at Mar-a-Lago, Cabinet meetings and the Oval Office. He exited the administration seemingly on good terms with Trump despite his pushback against the president's sweeping tax and spending bill — the centerpiece of Trump's domestic policy agenda, which is projected to add trillions of dollars to the deficit. Trump presented Musk with a golden key to the White House during a Friday farewell ceremony in Oval Office, during which the duo downplayed their differences and spoke highly of each other's work. However, Musk sharpened his criticism of Trump's 'big, beautiful bill' soon after, as he slammed the legislation as a 'disgusting abomination.' The president responded Thursday, saying he was 'very surprised' and 'disappointed' by Musk's comments and cast doubt on the future of their relationship. 'Elon and I had a great relationship. I don't know if we will anymore,' Trump said during an Oval Office appearance alongside German Chancellor Friedrich Merz. The situation quickly devolved into personal attacks. Musk fired back on his social platform X, suggesting the president would have lost the 2024 election without him, linking Trump to disgraced financier Jeffrey Epstein and backing calls for the president's impeachment. As the feud dragged on Thursday, Tesla's stock plunged 14 percent Thursday, costing the electric vehicle maker more than $150 billion. The company was still trying to fully recover from the fallout of Musk's highly controversial role in the Trump administration, leading the Department of Government Efficiency (DOGE). Tesla's stock is down 20 percent since the start of the year. 'The social media and war of words back and forth is not good for anyone and put massive pressure on Tesla shares with fears that Trump will turn from friend to foe and create a tough regulatory environment for Musk in the Beltway,' Wedbush Securities analysts wrote in a note Friday. 'Musk needs Trump and Trump needs Musk for many reasons, and these two becoming friends again will be a huge relief for Tesla shares,' they added. Ross Gerber, a longtime Tesla investor and CEO of Gerber Kawasaki Wealth and Investment Management, slammed Musk for the ripple effects his comments may have had on Tesla's stock. 'Trump is an angry and vindictive man who doesn't forget when slighted. This doesn't get solved other than Elon groveling back and publicly apologizing,' Gerber wrote on X Friday, adding in an earlier post, 'So Tesla investors are down $140 billion over this break up. About how much Musk claimed to saving for the US government.' As the back-and-forth unfolded Thursday, Gerber quipped, 'Can someone please take the phone away from him [Musk].' When pressed on the feud, White House press secretary Karoline Leavitt said Musk has a right to speak for his companies. 'So the only difference between Friday and today is Elon went back to his companies. And, as a businessman, he has a right to speak for his companies. But as president, President Trump has a responsibility to fight for this country,' she said Thursday on FOX News Channel's 'Hannity.' While Trump could pose new risks to Musk's business outlooks, analysts say the fight could also impede the president's ability to run the government. SpaceX held federal contracts with agencies like NASA and the Pentagon long before Trump's presidency, becoming a crucial partner to the federal government as it phased out the space shuttle program. If Musk reverses on his decision to keep Dragon in commission, experts say it could debilitate the U.S. space program 'If such threats were carried out, it would be catastrophic,' said space policy expert Mark Whittington, adding later, 'Without SpaceX, we're back to being dependent on the Russians.' NASA has increasingly relied on SpaceX for its infrastructure, including the Dragon capsule, which is the only U.S. system capable of getting crews to the International Space Station. Russia's Souyuz capsules, the Associated Press reported, are the only other way to get crews to the space station. While both Trump and Musk have much to lose from a war, some Republicans veterans aren't ruling out the chance of a reconciliation. 'There's always the possibility that Trump is serious about this, but I think if you take the 'Art of the Deal' seriously, he is often maximally negotiating,' said GOP strategist Chris Johnson. The feud appeared to cool slightly Friday morning, as Musk seemingly agreed with a post from hedge fund manager Bill Ackman, who suggested the pair 'should make peace for the benefit of our great country.' But Trump has shown no desire to talk to Musk despite reports the two might speak on the phone. 'I won't be speaking to him for a while, I guess, but I wish him well,' Trump told CNN's Dana Bash on Friday. Tesla's stock partially recovered amid hopes of a détente, rising 5 percent. 'If Musk is able to sue for peace and the onus is on him to make peace with Trump, then it'll be a blip in the screen and their bromance will be restored,' Seitchik told The Hill. However, he added, 'If this call goes poorly and this continues to escalate, then certainly Trump will look for every bit of leverage to inflict pain on Elon Musk and his businesses.'
Fox News
an hour ago
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FLASHBACK: Musk accused Trump, GOP leaders of not wanting to cut spending — here's where they said they would
Elon Musk's fiery feud with President Donald Trump spilled onto the top Republicans in Congress, where the tech billionaire questioned if their zeal to cut spending had disappeared. Musk launched into a social media assault this week against Trump's "big, beautiful bill," and accused Republicans of crafting a "disgusting abomination" full of wasteful spending. What started as a rant against the bill turned into pointed attacks against Trump, Senate Majority Leader John Thune, R-S.D., and House Speaker Mike Johnson, R-La. The tech billionaire and former head of Trump's Department of Government Efficiency (DOGE) lamented the bill as not cutting deep enough into Washington's spending addiction. The House GOP's offering, which is now being modified in the Senate, set a goal of $1.5 trillion in spending cuts. Musk set a benchmark of finding $2 trillion in waste, fraud and abuse to slash with his DOGE initiative, but fell far short, hitting only $160 billion in his four-month stint as a special government employee. Still, he came with receipts, questioning whether Trump, Thune and Johnson were actually committed to making deep cuts. Below are moments from the campaign trail and recent months compiled by Fox News Digital where the trio affirmed their commitment to putting a dent in the nation's nearly $37 trillion debt. A common theme for Trump during his 2024 presidential campaign was to go after the Biden administration, and his opponent, former Vice President Kamala Harris, for "throwing billions of dollars out the window." The then-presidential candidate vowed that should he win a second term, his incoming administration would halt wasteful spending. "We will stop wasteful spending and big government special interest giveaways, and finally stand up for the American taxpayer, which hasn't happened since I was president," he said. "We stood up. Our current massive deficits will be reduced to practically nothing. Our country will be powered by growth. Our country, will be powered by growth, will pay off our debt, will have all this income coming in." Thune has agreed with his colleagues in the House GOP that the tax cut package needs to achieve steep savings, and believes that the Senate GOP could take those cuts a step further. After the bill advanced from the House last month, the top Senate Republican re-upped his vow to slash federal funding. "It does everything that we set out to do. It modernizes our military, secures our border, extends tax relief and makes permanent tax relief that will lead to economic growth and better jobs in this country, and makes America energy dominant, coupled with the biggest spending reduction in American history," he said. "So those are our agenda items, and that's what we campaigned on. That's what we're going to do." Johnson had to strike a balancing act in the House to cobble together enough support behind the legislation, and struck deals and satisfied concerned lawmakers across the spectrum of the House GOP while still setting a goal of $1.5 trillion in spending cuts. Rooting out waste, fraud and abuse has been a continued mantra of the speaker and his allies. "I said this is the beginning of a process, and what you're going to see is a continuing theme of us identifying waste, fraud and abuse in government, which is our pledge of common sense, restoring common sense and fiscal sanity," Johnson said.
