In 2017, Bitcoin continued to outperform traditional assets such as stocks, precious metals, and bonds, solidifying its status as the premier digital asset of the 21st century. Mainstream financial publication Bloomberg even called Bitcoin an “exchange traded fund (ETF) on steroids.” Beyond direct purchases, investors gained exposure through increasingly traditionalized vehicles—trusts, self-directed IRAs, hedge funds, and other instruments—which saw remarkable gains.
BK Capital Management: A CNBC Host’s Crypto Fund
BK Capital Management (BKCM), founded by CNBC host and investment analyst Brian Kelly, specializes in the macroeconomics of digital assets. The fund offers mainstream investors exposure to Bitcoin and other cryptocurrencies. Kelly, a vocal advocate for Bitcoin on CNBC, focuses the fund on liquid exchange-traded digital assets. BKCM’s managers claim fluency in “traditional capital markets, blockchain assets, and technology experience.”
Grayscale Bitcoin Trust (GBTC): 220.59% Gain in 2017
The Grayscale Bitcoin Investment Trust (GBTC), managed by Barry Silbert of the Digital Currency Group (DCG), provides a publicly quoted vehicle for Bitcoin exposure. It can be held in traditional self-directed IRAs. In 2017, GBTC gained an impressive 220.59%, outperforming the S&P 500, gold shares, and Treasury bonds. However, GBTC shares typically trade at a premium compared to direct Bitcoin purchases. Grayscale also offered an Ethereum Classic trust (ETC) eligible for IRA accounts.
Ark Investment Management: Innovation Meets Digital Assets
Ark Innovation ETF (ARKK) invests in innovative technologies and companies, including GBTC. Ark’s founder and CIO Cathie Wood states: “We're believers in Bitcoin, the currency, and Bitcoin, the technology platform.” Ark offers four ETFs spanning industrial innovation, web 3.0, genomics, and innovation.
Self-Directed IRAs and Retirement Accounts
Self-directed IRAs allowed investors to add Bitcoin to their retirement portfolios. California-based Bitcoin IRA enabled purchases of Bitcoin and Ethereum using traditional IRAs or 401(k) accounts, offering interest-bearing accounts leveraging high crypto returns. Other providers like Millennium Trust, Entrust Group, and Pensco also facilitated Bitcoin IRA investments. Millennium Trust noted: “Technology is having a transformative effect on our daily lives, and the alternative investment industry is no different.”
Mainstream Platforms Join the Fray
In 2017, Britain’s largest online trading platform, Hargreaves Lansdown (managing over £70 billion), allowed its 876,000 customers to invest in Bitcoin. Despite the lack of SEC-approved ETFs, numerous similar options existed. As cryptocurrency values surged exponentially, more mainstream funds and IRAs were expected to include digital assets. This retrospective analysis highlights the early foundations of crypto-traditional finance convergence.