Cathie Wood, the founder of Ark Invest, has warned investors about a specific type of Bitcoin ETF that they should avoid. Wood believes that investors should steer clear of leveraged or inverse Bitcoin ETFs, as they can be risky and volatile investments.
Leveraged ETFs use borrowed money to amplify returns, which can lead to higher gains but also higher losses. Inverse ETFs, on the other hand, aim to profit from a decline in the price of Bitcoin, which can be difficult to predict and result in significant losses.
Wood advises investors to stick to traditional Bitcoin ETFs that track the price of the cryptocurrency without using leverage or inverse strategies. These ETFs offer a more straightforward and less risky way to invest in Bitcoin, allowing investors to benefit from the potential growth of the cryptocurrency without exposing themselves to excessive risk.
By following Wood’s advice and avoiding leveraged or inverse Bitcoin ETFs, investors can protect themselves from unnecessary volatility and potential losses in their investment portfolios.