Bitcoin's journey from a fringe digital currency to a mainstream financial asset has been tumultuous, drawing both significant interest and concern. In a recent discussion, Roundtable anchor Rob Nelson, Richard Levin, Chair of FinTech and Regulation Practice at Nelson Mullins, and Aaron Williams, co-host of Bitcoin Bros, delved into the complexities of bitcoin's place in institutional balance sheets and strategies for retail investors.

Nelson kicked off the conversation by addressing the challenges companies face when holding bitcoin on their balance sheets. He highlighted the volatility concerns that can deter organizations from retaining significant amounts of the cryptocurrency, drawing a stark comparison to Michael Saylor's MicroStrategy, which has heavily invested in bitcoin.

Richard Levin, reflecting on his early involvement in the crypto space, emphasized the unexpected evolution of bitcoin ETFs, which he referred to as ETPs (Exchange Traded Products). He remarked, “If you had told me 14 years later we'd be talking about 11 bitcoin ETFs issued by some of the largest financial institutions in the world, I would've laughed.” Levin pointed out the SEC’s primary missions: Promoting capital formation, protecting market integrity, and safeguarding the investing public. He noted that bitcoin, not classified as a security and traded on markets regulated as money service businesses rather than exchanges, poses unique challenges for investor protection and market integrity.

Levin further explained the significance of bitcoin ETPs, which offer retail investors a way to gain exposure to bitcoin without the complexities of direct ownership. This development, he argued, aligns with the SEC's goal of balancing technological advancement with investor protection. "The introduction of bitcoin ETPs is an important step," Levin stated, highlighting how these products provide a safer entry point for retail investors.

Nelson then turned to Aaron Williams, asking how Bitcoin Bros advises their audience on managing bitcoin's notorious volatility. Williams emphasized the strategy of dollar-cost averaging (DCA), which involves regularly investing a fixed amount of money into bitcoin regardless of its price. He explained, “It has been the best-performing asset over the past 10 years. If you can dollar-cost average over a couple of years, you'll buy the highs and you'll also buy the lows.” This method, he suggested, can mitigate the fear of significant price drops.

Williams also advised viewers to consider increasing their investments during periods of market fear, citing the example of bitcoin's price drop to $18,000 following the FTX debacle. He likened this approach to traditional investing principles, where consistent, small contributions from each paycheck can build a substantial investment over time without the stress of market fluctuations.