The smartest way to invest in cryptocurrencies with $100 right now

Key Points

• Investors can invest in Bitcoin directly or indirectly through spot Bitcoin ETFs.
• Spot Bitcoin ETFs provide 1:1 tracking with the price of Bitcoin, with ultra-low fees.
• These ETFs make it easier for investors to adjust their cryptocurrency portfolio allocations.

If you only have $100 to invest in the crypto market right now, you might be surprised to see the current prices. Bitcoin is trading at $111,000 and Ethereum at $4,500.

What is the best way to make use of that money? Instead of wasting it on speculative coins that cost pennies, there is a smarter way to invest.

Choosing the right cryptocurrency

There are thousands of cryptocurrencies, but only one —Bitcoin— represents nearly 60% of the total market value. It is the benchmark that all others follow, and it is often the first cryptocurrency purchased by both retail and institutional investors.

The popularity of Bitcoin is easy to understand, given its unparalleled track record of success. For much of the last decade, it has been the best-performing asset in the world. As a result, its price has risen from $10,000 in 2017 to over $111,000 today.

Bitcoin ETFs

You could buy $100 of Bitcoin on a major exchange. But there is a smarter way: buy shares of the new spot Bitcoin ETFs. These funds offer an easy, convenient, and cost-effective way to invest.

In fact, for less than $100, you can buy a full share of almost any Bitcoin ETF. For example, the most popular one is the iShares Bitcoin Trust, which trades at $63. You could also buy the Fidelity Wise Origin Bitcoin Fund at $97 per share, or the Ark 21 Shares Bitcoin ETF for just $37.

The choice is yours. The price differences simply reflect the amount of Bitcoin each ETF holds and the number of shares issued. There is no real difference between using your $100 to buy three shares of the Ark ETF or one share of Fidelity's. You still get $100 exposure to Bitcoin.

All these ETFs have similar expense ratios, so there is no real savings in choosing one over the other. For example, both iShares and Fidelity have an expense ratio of 0.25%, while Ark is slightly lower at 0.21%.

ETFs offer 1:1 tracking of Bitcoin

Since Bitcoin has been the best-performing asset in the world for much of the last decade, it is important that any ETF can track its price on a 1:1 basis. If Bitcoin rises more than 100% in a year ( as it did both in 2024 and in 2023), the value of your ETF will also rise more than 100%.

The main Bitcoin ETFs do a fantastic job tracking the price. That's what makes them so valuable: you get a 1:1 tracking, in the form of an investment product that is easy to buy and sell.

Adjusting the correct allocation

Another advantage of using ETFs is that they facilitate adjusting your portfolio allocations to your preferences.

For example, if the total value of your portfolio is $10,000 and you put $100 in Bitcoin ETFs, your allocation to crypto would be approximately 1%.

If that allocation is too low for you, you could increase how much you plan to spend on Bitcoin. And if it's too high, you can easily reduce your initial purchase.

Buy and hold Bitcoin for the long term

Overall, Bitcoin remains the best cryptocurrency to buy and hold for the long term. Analysts project that its price could reach $1 million in the next five years, so it's not too late to start.

If you have $100 to spend, it is definitely worth exposing yourself to Bitcoin now, before its price skyrockets. In five years, it could turn out to be one of the best investments you've made.