Bitcoin price broke through the psychologically important $100,000 level overnight, leading gains among cryptocurrencies early Tuesday.
Cryptos have rallied across the board since November on hopes that the incoming Trump administration will further boost the digital coins. The rally stumbled in mid-December as the Federal Reserve indicated a more hawkish stance in 2025 with fewer rate cuts than previously expected.
Cryptocurrencies typically gain when interest rates fall as riskier assets such as Bitcoin or XRP see higher demand. Traders still expect rates to go down, but just not as much as they previously expected. That should be bad for high-risk assets, since the lower rate expectations were priced in. But the change in rate expectations doesn’t seem to be hurting cryptos now.
“There’s clearly a risk-on sentiment, as seen in Bitcoin back above $101K, and that is normal for January,” market strategist Louis Navellier wrote late Monday. “Investors tend to be more aggressive, having the luxury of a long year ahead to recover from any missteps.”
Bitcoin is up 9% since the start of the year. XRP has risen 18% over the same period..
Buying the best ETFs FAQ
What is the best ETF to buy right now?
There are lots of good ETFs to buy in any market environment. In late 2024, the iShares Core Dividend Growth ETF looked relatively more attractive than other top ETFs.
Its price had underperformed the market (up about 23% over the past 12 months compared to an almost 32% gain for the S&P 500) as higher interest rates weighed on stocks with higher dividend yields. However, with rates expected to continue falling in 2025, dividend stocks could outperform, making this ETF look like one of the best to buy right now.
What is the most successful ETF?
The most successful ETF over the last 10 years is the VanEck Semiconductor ETF (NASDAQ:SMH). The fund focuses on semiconductor stocks and has delivered a 28.2% average annualized total return over the past decade, according to ETF.com. Of note, four of the 10 best-performing ETFs over the last 10 years focused on semiconductors, while all of the top 10 performers focused on technology stocks.
Are ETFs best for beginners?
ETFs are great for beginners because they take the guesswork out of picking individual stocks. The best ETF for beginners is one focused on the broader market.
Top options include the S&P 500-focused Vanguard 500 ETF or the even broader Vanguard Total Stock Market ETF. Both own hundreds of stocks and have low expense ratios. They provide investors with instant exposure to a diversified portfolio of stocks for a very reasonable cost.
Are ETFs still a good investment?
ETFs can be very good investments. Many ETFs enable you to invest passively in a broader stock market index at a low cost, allowing you to earn market returns. Other ETFs are great options for those seeking passive income from dividend stocks or bonds. ETFs can also help investors earn market-beating returns by investing in a sector or group of stocks growing at above-average rates (like semiconductor and technology stocks).
What ETF pays the highest dividend?
According to data from ETFdb.com, dozens of ETFs offer dividend yields in the double digits as of late 2024. However, many of the ETFs with the highest dividends are very small leveraged ETFs, making them exceptionally risky.
Even so, a couple of high-dividend ETFs stood out for yield-seeking investors: The Global X NASDAQ 100 Covered Call ETF (NASDAQ:QYLD) and the JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ). Both used a covered call strategy to generate options income on a well-known market index (Nasdaq-100), enabling them to pay yields of about 10%.
