More than a dozen Bitcoin ETFs now offer easy 1-to-1 exposure to the cryptocurrency’s price.
Key Points
- There are currently more than a dozen distinct spot Bitcoin ETFs, with the iShares Bitcoin Trust leading the pack.
- Most broking accounts provide spot Bitcoin ETFs, which often have extremely cheap management costs.
The Simplest Way to Get Exposure to Bitcoin Without Buying It Directly:
If you’re thinking about purchasing Bitcoin (BTC +0.60%), you have many ways to get exposure to the world’s best cryptocurrency. For example, you may purchase it directly on a crypto market. Or you may purchase a Bitcoin proxy stock, such as MSTR (+4.15%).
But by far the simplest option is to purchase one of the new spot Bitcoin ETFs. The first of them was released in January 2024, and they’ve done very well. They had swiftly raised more than $100 billion from investors within a year of their launch.
Which Bitcoin ETF?
The only hard part, frankly, is choosing which of the spot Bitcoin ETFs you would like to buy. All told, there are now more than a dozen such ETFs.
All of these spot ETFs track Bitcoin’s price on a 1:1 basis. So if the price goes up, the ETF price also goes up. The Bitcoin ETF will also lose value if the underlying bitcoin price drops.
By far, the most popular of these spot ETFs is the iShares Bitcoin Trust (IBIT) (0.11%), which today manages over $61 billion. This is the one most often studied for evidence of changes in investor sentiment when monitoring flows into and out of Bitcoin ETFs.
The Fidelity Wise Origin Bitcoin Fund (FBTC +0.01%) is a distant second with $14 billion in assets under management. In third place overall is the Greyscale Bitcoin Trust (GBTC +0.05%) with $12 billion in assets under management.
Factors to keep in mind
What’s so appealing about these ETFs is that they’re often accessible via a regular broking account. So purchasing these Bitcoin ETFs is just like buying any other ETF. You don’t need any crypto knowledge, and you don’t need to connect a blockchain wallet to your account.
If so, you should still check if your broking allows access to these ETFs. Spot Bitcoin ETFs have been prohibited or barred by several large broking companies and wealth management platforms due to the potential risks associated with crypto. Consider the yearly management costs. As a rule of thumb, you should generally go for the lowest-fee Bitcoin ETF available.
The good news is that virtually all of these bitcoin ETFs have low management fees, which makes them ideal for individual investors. For example, the iShares Bitcoin Trust has a typical annual cost fee of 0.25%. The newly created Morgan Stanley Bitcoin Trust (MSBT+0.09%) has the lowest fees at only 0.14%.
And given their similarity, any of the new spot Bitcoin ETFs will do the job. They just hold the coin for you, which means you have almost perfect 1:1 exposure to its price. If Bitcoin continues its meteoric rise in value, as many investors predict it will, you’ll be in a position to enjoy the full benefit of this gain.
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The CEO of Nvidia has said there’s one discovery that might produce more billionaires in the next 5 years than the internet did in 20 years.
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