- Invesco QQQ and SPY ETFs are two of the best SWAN ETFs in the financial market.
- Investing on the two funds is a bet on the American economy since it tracks its biggest companies.
- A case for investing in Bitcoin alongside QQQ and SPY can be made.
The SPDR S&P 500 (SPY) and Invesco QQQ (QQQ) are two of the biggest exchange-traded funds (ETFs) in the world. Combined, they have over $650 billion in assets under management (AUM).
These funds have done well over the years. In the past 12 years, QQQ has jumped by over 146% while the SPY fund has risen by more than 84%. They have risen, helped by the strong performance of big technology companies like Nvidia, Amazon, Apple, and Amazon.
Most investors love QQQ and SPY because of the quality companies they track and their stability over the years. Investing in the two funds is a bet on the United States, the biggest economy in the world.
Further, QQQ and SPY pay regular dividends to investors, which are ideal for long-term investors. These payouts can form a good part of free cash flows, especially for retirees. Therefore, they are mostly seen as Sleep Well at Night (SWAN) funds.
Investors who love SPY and QQQ might also consider Bitcoin as a long-term investment for several reasons. First, as shown below, Bitcoin has historically outperformed these assets over the years. As shown below, Bitcoin is up by 773% in the past five years. It has done much better since 2009.
Past performance is not always an indicator of what to expect in the future. However, history shows that investing in momentum stocks tend to outperform value stocks over time. Bitcoin could continue to outshine these assets in the next decade.
Second, conditions for Bitcoin are much better than in the past. For one, Bitcoin has achieved a $700 billion market cap with little institutional investor uptick. Now, there are signs that institutions are embracing the coin.
Some like Invesco, Blackrock, and Franklin Templeton have applied for spot ETFs. Therefore, the next phase of Bitcoin price rally could be driven by more institutional inflows.
Third, Bitcoin has survived numerous near death experiences. It survived the collapse of FTX, Terra, Mt Gox, Celsius, and Three Arrows Capital. Most investors expected Bitcoin to struggle especially after FTX imploded. At its peak, FTX was the second-biggest exchange in terms of valuation.
Fourth, Bitcoin provides uncorrelated returns with American equities. Further, Bitcoin halving will have a positive impact on its price over time by reducing BTC rewards.
Finally, Bitcoin will likely benefit from the next phase of monetary policy, where most analysts expect it to start slashing interest rates. BTC does well when the Fed is in a dovish gone.
Therefore, it makes sense for SPY and QQQ investors to use Bitcoin or BITO ETF as a way to diversify their returns. In this case, one of the best approaches is to invest in Bitcoin itself and store it in a safe place. The alternative is to invest in BITO ETF, Grayscale Bitcoin ETF, and the upcoming spot ETFs.
