Bitcoin (BTC) has recently entered the realm of exchange-traded funds (ETFs). These financial instruments enable investors to tap into the alluring possibilities of BTC without the need to directly possess or securely store it. Initially, Bitcoin ETFs were limited to holding Bitcoin futures contracts, stocks of companies, and other ETFs linked to cryptocurrencies. However, as of January 10, 2024, the Securities and Exchange Commission has given its approval for 11 spot Bitcoin ETFs to be traded in the United States.
Bitcoin is inherently a speculative investment, lacking a fundamental rationale for its current valuation. Its price is subject to the ebb and flow of supply and demand, making future price movements challenging to forecast. By allocating a modest portion of your portfolio to bitcoin, there exists the potential for substantial gains while mitigating the risk of potential losses.
What is the Best Bitcoin ETF?
- BITS: Global X Blockchain & Bitcoin Strategy ETF
- MAXI: Simplify Bitcoin Strategy PLUS Income ETF
- BITO: ProShares Bitcoin Strategy ETF
- DEFI: Hashdex Bitcoin Futures ETF
- BTF: Valkyrie Bitcoin and Ether Strategy ETF
- XBTF: VanEck Bitcoin Strategy ETF
- BITB: Bitwise Bitcoin ETF
- ARKB: ARK 21Shares Bitcoin ETF
- FBTC: Fidelity Wise Origin Bitcoin Trust
- IBIT: iShares Bitcoin Trust
- BRRR: Valkyrie Bitcoin Fund
- HODL: VanEck Bitcoin Trust
- EZBC: Franklin Bitcoin ETF
- BTCW: Wisdom Tree Bitcoin Fund
- BTCO: Invesco Galaxy Bitcoin ETF
- GBTC: Grayscale Bitcoin Trust (BTC)
Here is a table comparing similar bitcoin ETFs as of December 31, 2023.
| Manager |  |  |  |  |  |  |  |  |  |  |  |  | |  | |  |
| ETF | ARKB | BITB | IBIT | FBTC | EZBC | BITS | GBTC | DEFI | BTCO | BITO | MAXI | BRRR | BTF | HODL | XBTF | BTCW |
| Inception | 2024-01-10 | 2024-01-10 | 2024-01-05 | 2024-01-10 | 2024-01-11 | 2021-11-15 | 2024-01-10 | 2022-09-15 | 2024-01-11 | 2021-10-18 | 2022-09-29 | 2024-01-10 | 2021-10-21 | 2024-01-10 | 2021-11-15 | 2024-01-10 |
| MER | 0.21% | 0.20% | 0.25% | 0.25% | 0.29% | 0.65% | 1.50% | 0.90% | 0.39% | 0.95% | 0.97% | 0.25% | 1.20% | 0.25% | 0.66% | 0.30% |
| AUM | $10,300,000 | $2,500,000 | $10,635,116 | $20,000,000 | N/A | $26,100,000 | $28,618,142,691 | $17,727,712 | $5,000,000 | $880,410,000 | $36,874,681 | $520,000 | $38,196,375 | $76,570,000 | $58,300,000 | N/A |
| 1M | N/A | N/A | N/A | N/A | N/A | 32.12% | 11.36 | 10.17% | N/A | 10.05% | 11.25% | N/A | 10.72% | N/A | 7.90% | N/A |
| 3M | N/A | N/A | N/A | N/A | N/A | 80.69% | 66.85 | 51.48% | N/A | 52.37% | 53.36% | N/A | 53.76% | N/A | 48.42% | N/A |
| 6M | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 30.57% | N/A | 32.12% | 33.86% | N/A | N/A | N/A | N/A | N/A |
| 1Y | N/A | N/A | N/A | N/A | N/A | 214.05% | N/A | 137.18% | N/A | 137.25% | 143.55% | N/A | 136.95% | N/A | 131.21% | N/A |
1. Global X Blockchain & Bitcoin Strategy ETF
The Global X Blockchain & Bitcoin Strategy ETF (BITS) is an actively-managed fund that seeks to capture the long-term growth potential of the blockchain and digital assets theme. The Fund takes long positions in U.S. listed bitcoin futures contracts and invests, directly and/or indirectly, in companies positioned to benefit from the increased adoption of blockchain technology. BITS will not invest directly in bitcoin, and it currently delivers exposure to blockchain companies through other ETFs, including the affiliated Global X Blockchain ETF.
2. Simplify Bitcoin Strategy PLUS Income ETF
The Simplify Bitcoin Strategy PLUS Income ETF (MAXI) seeks capital gains and income by providing investors with exposure to Bitcoin while simultaneously generating income by selling short-dated put and/or call spreads on a variety of equity and fixed-income instruments, which may include indices, ETFs or individual securities.
The fund is designed to be a capital-efficient way to simultaneously invest in Bitcoin and potentially generate significant income. The fund can also be viewed as bitcoin exposure with a downside buffer, by the padding the income may create to any bitcoin drawdowns. The fund does not invest in bitcoin directly; it invests in bitcoin futures.
3. ProShares Bitcoin Strategy ETF
BITO invests in bitcoin futures and does not invest in bitcoin. There is no guarantee the fund will closely track bitcoin returns.
- BITO has closely tracked the performance of spot bitcoin, since inception
- Familiarity, liquidity and transparency of an ETF
- Available through a brokerage account—no need for a cryptocurrency exchange account or wallet
4. Hashdex Bitcoin Futures ETF
The Hashdex Bitcoin Futures ETF (DEFI) gives investors access to the world’s first truly global asset — from the only global asset manager focused exclusively on crypto. DEFI is uniquely designed for innovative investors seeking price exposure to bitcoin.
5. Valkyrie Bitcoin and Ether Strategy ETF
BTF is an actively managed ETF available through Nasdaq that invests primarily in bitcoin and ether futures contracts. Ask your broker or search your online account for “BTF”.
- Gain exposure to the emerging bitcoin and ether economies
- Access through a traditional actively managed exchange traded fund
- Invest through the regulated futures market
- Managed by a digital asset investment firm
6. VanEck Bitcoin Strategy ETF
VanEck Bitcoin Strategy ETF is an actively managed exchange-traded fund (“ETF”) that seeks capital appreciation by investing in standardized, cash-settled bitcoin futures contracts. The Fund does not invest in bitcoin or other digital assets directly
7. Bitwise Bitcoin ETF
BITB provides low-cost access to bitcoin through a traditional, professionally managed ETF. Backed by Bitwise’s specialist expertise, deep research, and six-year track record managing crypto assets for leading institutional investors, the fund invests directly in bitcoin and is easily accessible from a brokerage account.
8. ARK 21Shares Bitcoin ETF
ARKB seeks to track the performance of bitcoin, as measured by the performance of the CME CF Bitcoin Reference Rate – New York Variant {the “Index”), adjusted for the Trust’s expense’s and other liabilities. An investment in the Trust is not a direct investment in bitcoin. Investors will also forgo certain rights conferred by owning bitcoin directly.
9. Fidelity Wise Origin Bitcoin Trust
Seeks to track the performance of bitcoin as measured by the performance of the Fidelity Bitcoin Reference Rate, adjusted for the Trust’s expenses and other liabilities. In seeking to achieve its investment objective, the Trust holds bitcoin and values its shares daily based on the same methodology used to calculate the benchmark index.
10. iShares Bitcoin Trust
The iShares Bitcoin Trust seeks to reflect generally the performance of the price of bitcoin. The iShares Bitcoin Trust is not an investment company registered under the Investment Company Act of 1940, and therefore is not subject to the same regulatory requirements as mutual funds or ETFs registered under the Investment Company Act of 1940. The Trust is not a commodity pool for purposes of the Commodity Exchange Act. Before making an investment decision, you should carefully consider the risk factors and other information included in the prospectus.
- Access: IBIT enables investors to access bitcoin within a traditional brokerage account.
- Convenience: IBIT can help remove operational burdens associated with holding bitcoin directly, as well as potentially high trading costs and tax reporting complexities.
- Quality: IBIT is built by BlackRock, the world’s largest asset manager and ETF provider, with a history of innovation
11. Valkyrie Bitcoin Fund
The Valkyrie Bitcoin Fund (the “Trust”) is an exchange-traded fund that issues common shares of beneficial interest (the “Shares”), which represent units of fractional undivided beneficial interest in and ownership of the Trust. The Trust’s purpose is to hold bitcoin, which is a digital commodity based on the cryptographic protocols used by the decentralized, peer-to-peer bitcoin computer network.
12. VanEck Bitcoin Trust
The Trust’s investment objective is to reflect the performance of the price of Bitcoin less the expenses of the Trust’s operations. The Trust is a passive investment vehicle that does not seek to generate returns beyond tracking the price of bitcoin.
- Simplicity: Cost-efficient bitcoin exposure in a traditional, regulated structure
- Security: Shares are physically backed by bitcoin and held in cold storage at a regulated, qualified custodian
- Credibility: VanEck is an established ETF issuer with dedicated crypto-related product experience
13. Franklin Bitcoin ETF
EZBC seeks to reflect generally the performance of the price of bitcoin before payment of the fund’s expenses.
- Simple: Convenient and cost-effective, lowering the barrier of entry into the crypto market
- Credible: Offered by Franklin Templeton, a trusted partner to clients for 75 years, custodied by Coinbase, and registered under the Securities Act of 1933
- Opportunity: Exposure to an emerging asset class still early in its adoption cycle, with the potential for attractive returns for risk-tolerant investors willing to embrace volatility
14. Wisdom Tree Bitcoin Fund
The Wisdom Tree Bitcoin Fund is an exchange-traded fund whose investment objective is to gain exposure to the price of bitcoin, less expenses and liabilities, by holding bitcoin. The Fund will generally value its shares daily using an independently calculated value based on an aggregation of executed trade flow of major bitcoin spot exchanges.
- Gain exposure to movements in the price of bitcoin
- Use to complement exposures to traditional asset classes, like equities and bonds, with an exposure that may move differently as economic and market conditions change
- Use to satisfy demand for a way to access exposure to bitcoin through the ETF wrapper on traditional platforms where US investors are able to trade other ETFs
15. Invesco Galaxy Bitcoin ETF
BTCO is a new spot bitcoin ETF designed to help investors get secure, convenient exposure to the world’s largest cryptocurrency. Invesco Galaxy Bitcoin ETF (the “Trust”) is an exchange-traded fund that issues common shares of beneficial interest (the “Shares”) that trade on Cboe BZX (the “Exchange”) under the ticker symbol “BTCO”. The Trust’s investment objective is to reflect the performance of the spot price of bitcoin as measured using Lukka Prime Reference Rate (the “Benchmark”), less the Trust’s expenses and other liabilities.
For a 6-month period commencing on January 11, 2024, the Sponsor intends to waive the entire Sponsor Fee on the first $5 billion of Trust assets.
16. Grayscale Bitcoin Trust (BTC)
Grayscale Bitcoin Trust is one of the first securities solely and passively invested in Bitcoin (“BTC”) that enables investors to gain exposure to BTC in the form of a security while avoiding the challenges of buying, storing, and safekeeping BTC, directly. Shares (based on BTC per Share) are designed to reflect the value of BTC held by the Trust, determined by reference to the Index Price, less the Trust’s expenses and other liabilities.
Bitcoin is a digital asset that is created and transmitted through the operations of the peer-to-peer Bitcoin Network, a decentralized network of computers that operates on cryptographic protocols. The Bitcoin Network allows people to exchange tokens of value, Bitcoins, which are recorded on a public transaction ledger known as a Blockchain.
What is Bitcoin?
Bitcoin serves as a decentralized cryptocurrency that operates independently of traditional government-backed currency systems like the Dollar or the Euro. Ownership rights are governed by possession of computer-generated keys, and payments are validated and processed through a network of equally empowered computers, eliminating the need for a centralized bank. The administration of transactions relies on a decentralized and synchronized accounting system known as the blockchain.
Established in 2009, Bitcoin holds the distinction of being the oldest cryptocurrency. Its exchange rate with conventional currencies adheres to stock exchange pricing principles. The creation of new Bitcoin units involves solving cryptographic challenges through a process known as mining, demanding substantial energy and computing resources. The algorithm governing Bitcoin establishes a perceived limit on its capacity.
What Is a Bitcoin ETF?
These ETFs issue shares to investors through the open market and utilize the proceeds to construct a portfolio based on a market index, a specific stock market sector, or another asset class, such as cryptocurrency. Comparable to mutual funds, ETFs differ in that they are directly traded on a stock exchange, just like regular shares.
Why Should I Buy a Bitcoin ETF Instead of Bitcoin?
Certain investors may perceive a greater sense of security in integrating Bitcoin exposure into their portfolios through the acquisition of a professionally managed ETF, rather than directly owning BTC. The widespread adoption of Bitcoin as an investment is a relatively recent phenomenon, and apprehensions about potential hacking, password loss, or misplacement of private keys necessary for accessing investments stored in a secure Bitcoin wallet may exist.
Furthermore, not everyone finds the process of purchasing Bitcoin through a cryptocurrency exchange suitable for them. While platforms like Coinbase are accessible to almost anyone, not everyone feels at ease engaging with such platforms. Some individuals may also face restrictions in buying and selling securities on traditional brokerage accounts for various reasons. For those opting to invest for retirement in an Individual Retirement Account (IRA) or a 401(k) plan, the desire to gain a modest exposure to Bitcoin without navigating the complexities of a crypto exchange or a Bitcoin IRA might make owning shares of a Bitcoin ETF a reasonable choice.
