Bitcoin exchange traded funds (ETFs) are similar to other ETFs, and you’ll need to follow these steps if you want to buy one of them:
On 11 January 2024, the US Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs (exchange-traded funds). This means you can now get exposure to Bitcoin’s price through traditional brokerages and in your retirement accounts.
A Bitcoin ETF allows investors to gain exposure to this volatile asset through a basket approach.
It’s like any other thematic-based ETF. If you believe a certain sector, theme or market could be the major winner moving forward but are unsure of the individual winners, taking a basket approach allows you to gain exposure while offsetting individual business risk.
An ETF approach to Bitcoin also allows investors a different way to gain exposure.
While there are many Bitcoin ETFs in circulation, many of which are inaccessible, the available ones offer investors different solutions. Some track movement in price while others follow businesses that are exposed to crypto assets. And while you should know what you own, a Bitcoin ETF could be a way of gaining access to the fastest-growing trend in financial markets.
Bitcoin ETFs all broadly follow the same theme, but they can be broken down into 3 main categories:
To invest in Bitcoin ETFs, you need a brokerage account. Review platform features and fees to find the account that best fits your needs.
Important: Share trading can be financially risky and the value of your investment can go down as well as up. “Standard brokerage” fee is the cost to trade $1,000 or less of ASX-listed shares and ETFs without any qualifications or special eligibility. If ASX shares aren’t available, the fee shown is for US shares. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.
There are plenty of Bitcoin ETFs circulating on global exchanges. The SEC recently approved 11 spot Bitcoin ETFs and these will become available to trade on various brokers and trading platforms over the coming days. Because spot Bitcoin ETFs have been on offer in Canada since 2021, a number of cryptocurrency or Bitcoin ETFs are already available to Canadian stock investors. Here is a list of current leading providers:
This is a summary of the fees charged on the 11 spot Bitcoin ETFs that have been approved:
| ETF issuer | Symbol | Initial fee | Long-term fee | Details |
|---|---|---|---|---|
| BlackRock | IBIT | 0.20% | 0.30% | First 12 months or US$5 billion AUM |
| Fidelity | FBTC | 0% | 0.39% | First 6 months or US$1 billion AUM |
| Invesco | BTCO | 0% | 0.59% | First 6 months and US$5 billion AUM |
| Grayscale | GBTC | 1.50% | 1.50% | N/A |
| ARK & 21 Shares | ARKB | 0% | 0.25% | First 6 months or $1 billion AUM |
| Bitwise Invest | BITB | 0% | 0.24% | First 6 months or $1 billion AUM |
| Franklin | EXBC | 0.29% | 0.29% | N/A |
| VanEck | HODL | 0.25% | 0.25% | N/A |
| Wisdomtree | BTCW | 0.50% | 0.50% | N/A |
| Valkyrie | BRRR | 0.80% | 0.80% | N/A |
| Hashdex | DEFI | 0.90% | 0.90% | N/A |
Bitcoin ETFs should positively affect Bitcoin price. Bitcoin will get more attention from mainstream investors, including financial advisers who wouldn’t otherwise want to get exposure to cryptocurrency. Having Bitcoin ETFs approved by the SEC could also boost investor confidence in this alternative asset.
Bitcoin ETFs are suited to a number of investors ranging from those who are already stock traders to those who are bullish on the future price of the asset class.
Buying one of the current Bitcoin ETFs means you will be investing in future contracts or in a company’s exposure to Bitcoin’s assets, but you will not hold the “physical” asset itself. As such, investors who are bullish on the price of the underlying asset, but do not want the hassle of owning a cryptocurrency wallet, could favour a Bitcoin ETF instead.
An ETF structure might also appeal to investors who own other stocks but want to gain exposure to Bitcoin assets.
Rather than signing up for 2 different accounts and having to track 2 different asset classes, investors can simply own an ETF.
While an ETF gives you the opportunity to get into the market, as it currently stands you won’t own the actual underlying assets. Instead, most trade using a model based on business exposure to Bitcoin or based on contracts for difference (CFDs), meaning you are trading on the future price of Bitcoin without owning it.
If you want to own Bitcoin, an ETF approach may not be best suited to your needs.
Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.
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