Bitcoin’s price action this year has renewed interest from both new and seasoned investors. If you read my earlier piece “Should I Have an Allocation to Bitcoin in My Portfolio?”, you already know the main questions you should consider before you allocate to Bitcoin.
Now that Bitcoin has dipped below the $100,000 level, I personally made the decision to add to my Bitcoin holdings. In this post, I want to explain why I believe owning Bitcoin directly is preferable to owning it through an ETF or alternative asset manager, how I’m approaching my own allocation, and how new investors can begin owning Bitcoin in a cost-efficient way.
Bitcoin Below $100K
Price alone does not determine value, but when Bitcoin trades below key reference points, like $100K, it signals a period where strategic investors can consider adding exposure without chasing price. My decision to buy was driven by:
- Valuation perception: Relative to past cycles, this price level feels like a discount for long-term holders who believe in Bitcoin’s monetary value proposition.
- Long-term thesis remains intact: Bitcoin’s decentralized monetary design, network security, and fixed supply continue to underpin its narrative as “digital gold.”
- Behavioral advantage: Buying when prices are emotionally lower helps enforce discipline and mitigate regret-driven trading.
I hope one day to own an entire Bitcoin outright in my portfolio, not a derivative, not an ETF, but the actual on-chain asset I can custody myself. I personally believe if you have any allocation at all to cryptocurrencies, it should be through self-custody or bought directly on an exchange like Coinbase.
Why Owning Bitcoin Directly Matters
If you believe in Bitcoin’s long-term thesis, that it is a monetary network with immutable supply, decentralized security, and global accessibility, then owning it directly rather than through asset managers is, in my view, the most efficient way to capture that thesis.
Here’s why:
- Lower Fees Over Time
Asset managers charge ongoing investment fees (expense ratios, advisory fees, custodial spreads) that slowly erode net returns. Even if these fees seem small, they compound across years and cycles. - Direct Custody Control
When you own Bitcoin directly in a self-custody wallet, you control the private keys. This removes custodial counterparty risk and aligns with the core principle of self-sovereignty that underlies Bitcoin itself. - No Intermediation
Direct ownership means there is no middleman between you and the asset. You are not subject to fund closures, redemption gates, or institutional liquidity constraints.
If your conviction is in Bitcoin the network and protocol, then owning the asset itself, not a managed product that tracks it, best aligns form with function.
A Simple Way to Start
Do not buy Bitcoin through an ETF, buy directly on Coinbase or another credible platform. If you are already familiar with crypto, continue with your preferred platform. If you are new to crypto and want to begin owning Bitcoin in a cost-effective way, feel free to use my referral code for Coinbase.
If you open an account with this link and buy at least $25 of Bitcoin, you will receive an additional $30 worth of Bitcoin to your account after a few days. This is a way to lower your effective entry cost when starting out, and it’s available for new Coinbase users. To be 100% transparent, I am also compensated in Bitcoin if you use that link.
How I’m Thinking About My Allocation to Bitcoin
My approach is not about short-term timing but strategic accumulation. Below are the principles guiding my allocation strategy:
- Accumulate incrementally rather than all at once.
- Maintain a percentage of total portfolio risk that aligns with my personal risk tolerance.
- Use price pullbacks as opportunities to add rather than signals to exit.
- Prefer direct ownership with self-custody, supplemented by secure exchange custody only when necessary.
I expect volatility to continue, that’s been inherent to Bitcoin, but I’m making additions when volatility presents favorable entry levels.
Final Thoughts
Owning Bitcoin directly is not a promise of guaranteed profits. No investment is. But if you believe in Bitcoin’s long-term monetary potential, then owning the actual asset, rather than a fee-based wrapper, is the most aligned way to express that belief.
Disclaimer: I own Bitcoin, and the link in this article does compensate me for referrals at no additional expense to you.