Summary I downgrade iShares Bitcoin Trust ETF from Buy to Hold after a strong rally and outperformance versus peers. IBIT has outpaced Coinbase and MicroStrategy but remains volatile and exposed to Bitcoin’s unpredictable direction. Risks include quantum computing threats, potential government restrictions, and competition from new Bitcoin ETFs, though IBIT’s 0.25% fee and scale remain advantages. I fully exited my IBIT model portfolio position, seeing better entry opportunities ahead amid uncertain Bitcoin price action and precious metals’ relative strength. I have never been a big fan of Bitcoin. Yes, I appreciate blockchain, but, until recently, I had no interest in cryptocurrency. In late February, I wrote about why it makes sense to invest in iShares Bitcoin Trust ETF ( IBIT ), but it has rallied, and I am no longer bullish. I have downgraded the ETF from Buy to Hold. IBIT Has Outpaced the Market The market has been crazy since I wrote my Buy recommendation on February 23rd, as the Iranian War began five days later, on Saturday, February 28th. Since February 27th, stocks are down, and precious metals are actually down. Here is the action since the last article: YCharts Bitcoin is still down a lot year-to-date, so perhaps the rebound is nothing but a bounce. In that Buy piece, I discussed two stocks that I have been watching closely recently that are pegged to Bitcoin: Coinbase Global ( COIN ) and Strategy Inc ( MSTR ). IBIT has outpaced both of them: YCharts Year-to-date, each of these is down, with COIN down 25.8%, IBIT down 16.3%, and MSTR down 15.3%. SPDR Gold Shares ( GLD ) and iShares Silver Trust ( SLV ) are up in 2026 by 10.3% and 7.2%, respectively, though they are both well below their peaks. The Direction of Bitcoin Could Go Either Way I suggested in that last article that Bitcoin (and IBIT) could catch up to COIN and MSTR, which it has. I pointed on the chart to some open gaps, and they do remain open: Schwab thinkorswim Not only are the three gaps open from January that I pointed out in that last article, but there is also a new one that was almost filled on Friday, when the high of $41.59 fell just short of the $41.61 low from March 17th. These gaps could get filled. There are also two gaps that were created last week below the current price that remain open. IBIT tracks Bitcoin, its only asset. The ETF, which now has 35,200 followers at Seeking Alpha, has net assets of $57.7 billion as of April 10th, according to the iShares website . The fund launched in early 2024 and still trades well above the all-time low of $22.02 set early in that year. Bitcoin, while sharply lower in 2026 and down over the past year, is still in a long-term upward trend: TradingView While Bitcoin has retreated sharply, it is still up about 915% since the end of 2019, a move that has far outpaced precious metals. Yes, it could keep retreating, as I suggested was a risk before, and it could keep bouncing too. The world is worried about the U.S. dollar, though it has not moved that much this year, and Bitcoin (and IBIT) could benefit from those concerns if they accelerate. Traditionally, gold has received interest for its ability to store wealth and protect from currency devaluations and inflation, but cryptocurrency can do so as well. A development that I think is favorable is that Wall Street seems to be opening up to the idea of cryptocurrency as an investment. The CFA Institute has shared information about cryptocurrency for a couple of years, and I think more work needs to be done to help people think of Bitcoin as a potential investment rather than a gamble. It has published a lot of research since 2023 on the subject and launched a valuation guide for investment professionals in late 2023. CFA Institute Risks and Opportunities for IBIT One of the risks to Bitcoin is that advances in quantum computing could allow hackers to get around the encryption that secures it. Another risk is that governments could restrict cryptocurrency. I have seen a lot of discussion about these two risks, but I am unaware of any progress by quantum computing yet or any governments moving to restrict Bitcoin. IBIT, which is focused exclusively on Bitcoin, faces the risk that other cryptocurrencies outpace Bitcoin. One of these is Ethereum, but there could be others. IBIT, which is not the only ETF for Bitcoin, launched when the government cleared the path through the SEC. IBIT has been the largest ETF, but there are new ETFs launching, including one that launched last week from Morgan Stanley ( MSBT ). I don't think that iShares needs to be concerned at this time, as its execution has been strong and its fee reasonable at 0.25%, though there is a risk that new ETFs end up eroding the overall market for Bitcoin. Currently, the next-largest Bitcoin ETF is less than 25% the size of IBIT. Conclusion When I wrote that article in February, I had no position in IBIT in my ETF model portfolio, which aims to beat 60% stocks and 40% bonds. I did add some the very next day after the article, paying $36.48 for a 3% position that I ended up selling the next day at $39.07. I did add some back at $38.03 the next day in the model portfolio, a 4% position, and I ended up boosting it. I went back and forth with this position, which was a maximum of 9.2% of the model portfolio, for a while, but I exited it completely last week. Yes, IBIT may continue to bounce, but it could also continue to retreat. When I see the action in precious metals, I get a bit discouraged. Additionally, IBIT has outpaced Coinbase and Strategy, Inc, both of which have market caps that are similar to the assets in IBIT. Predicting the future value of Bitcoin is quite challenging in my view, and I think that there could be a better opportunity to get long IBIT.
