Traders looking to buy and sell Bitcoin can now do so with exchange-traded funds (ETFs). The best Bitcoin ETFs make it easy and cheap to buy and sell the cryptocurrency through an online broker rather than through the potentially riskier process of using a cryptocurrency exchange.
The Securities and Exchange Commission approved spot Bitcoin ETFs in January 2024, giving traders a way to access Bitcoin without having to custody the crypto coin themselves or trade with an exchange that may be fraudulent. So it’s easier for everyone to gain exposure to Bitcoin.
Here are some of the best Bitcoin ETFs, including how much you’ll pay to invest in them.
Spot Bitcoin ETFs track the price of the crypto on effectively the same percentage basis, even if they trade at different prices. If Bitcoin rises one percent, then the fund should rise one percent. So you see that the funds have all risen approximately the same amount, with minor differences.
Which fund should you choose? If you were looking at two McDonald’s on the same block and they both offered Big Macs, it would make sense to go with the cheaper one. So it is with spot Bitcoin ETFs. Since these funds give you exposure to Bitcoin in the same way, their defining feature is their expense ratio, the percentage of your investment that they charge as a fee.
Some funds above are initially charging 0 percent fees for the first few months, as they pursue a “land grab” and look to grow their assets and users quickly. But those fees will eventually revert when their assets pass a certain threshold or the initial period of low fees expires.
A few funds may eventually become dominant and be able to lower their fees still more, and so draw in more investors, enabling them to lower prices even further and become more dominant.
The funds’ expense ratios are competitive with the fees for trading Bitcoin in all but the cheapest brokers and exchanges for cryptocurrency trading. So these Bitcoin funds can be a good option to keep your overall costs low while making it easy to trade from your existing online broker.
Should you invest in Bitcoin ETFs?
Of course, the existence of a cheaper and easier way to trade Bitcoin doesn’t make the digital coin a buy, only cheaper and easier to do so. So Bitcoin ETFs are a good way for traders to play Bitcoin if that’s already their intent, especially if it helps them avoid dubious crypto exchanges.
And SEC chief Gary Gensler nonetheless warned investors about cryptocurrency despite his agency’s approval of Bitcoin funds. “Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto,” he said.
In its short lifetime, Bitcoin has been notoriously volatile, rocketing and plunging precipitously. That volatility has been great for adept traders since they make money on the volatility, and it hasn’t been too bad either for traders who have the stomach to hold on through the highs and lows. But many people tend to buy high and sell low, as the volatility melts their resolve.
Finally, it’s vital to know that Bitcoin is not backed by anything except the sentiment of traders. Unlike a stock, which is backed by the assets and cash flow of an underlying business, Bitcoin and most other cryptocurrencies rely solely on traders’ expectations to prop up their prices. It’s what investing experts call the “greater fool theory of investing,” since traders make money only by selling to someone else who is more optimistic about the cryptocurrency’s price potential.
The emergence of spot Bitcoin ETFs makes it easier and cheaper for traders to take a stake in the digital currency using just their traditional broker. These funds may well open up Bitcoin to wider acceptance as a store of value and push up the price of the cryptocurrency even more.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
If long-term price performance is your only investment goal, then the new Bitcoin ETFs make a lot of sense. However, you could prefer direct-asset ownership of Bitcoin if you are concerned about the regulatory or legal aspects of crypto.
If long-term price performance is your only investment goal, then the new Bitcoin ETFs make a lot of sense. However, you could prefer direct-asset ownership of Bitcoin if you are concerned about the regulatory or legal aspects of crypto.
According to data from Blockworks, the lowest-cost spot bitcoin ETF available is the Franklin Bitcoin ETF (EZBC), which has a fee of 0.19%.2 In addition, for GBTC's existing shareholders, this spinoff won't trigger a taxable event, meaning they won't face capital gains tax for transferring their holdings to the new ...
He said that the current demand has been largely coming from retail investors, hedge funds and independent financial advisors. Bitwise's Bitcoin Fund (BITB) is one of four spot bitcoin ETFs that have crossed $1 billion in AUM since launch.
At the very least, you should have enough emergency savings before putting any funds into crypto. Once you're ready to invest, you should make it no more than 5% of your portfolio. This is enough to gain exposure to potential gains while limiting the impact of losses on the overall portfolio.
A spot crypto ETF invests directly in cryptocurrency and trades on behalf of investors. A crypto futures ETF does not hold digital tokens. Instead, it invests in crypto futures contracts. Risks include the unregulated nature of crypto markets, even when trading through regulated exchanges in the U.S.
While the new spot bitcoin ETFs are designed to track the bitcoin price directly, they do not impact it in the same way. Buying a share of an ETF has no real-time impact on bitcoin's price through direct means. In fact, the bitcoin represented by the share is not even purchased until the next trading day.
However, Vanguard does not have plans to create a Vanguard bitcoin ETF or other crypto-related products. Additionally, such products from other issuers will not be offered on our brokerage platform.
Clients looking for spot Bitcoin ETFs can find these and other third-party ETF and mutual fund products available at Schwab. These funds invest in cryptocurrencies, cryptocurrency futures contracts, or equities related to cryptocurrencies.
Spot bitcoin ETFs demanding 2,800 bitcoins each day while only 900 are produced during the same period is having a profound impact on the market, according to CoinShares.
1 USD equals 0.000016 BTC. The current value of 1 United States Dollar is -1.38% against the exchange rate to BTC in the last 24 hours. The current Bitcoin market cap is $1.27T. Create a free Kraken account to instantly convert USD to BTC today.
Investing $100 in Bitcoin: A $100 investment in Bitcoin today could buy 0.00239 BTC, based on a current price of $41,810.58 at the time of writing. Bitcoin hit an all-time high of $68,789.63 in November 2021.
A: You can cash out Bitcoin through exchanges like Coinbase, Kraken, or Binance by linking your bank account, or use Bitcoin ATMs for direct conversion to cash. Smaller exchanges like HODL HODL, and decentralized finance applications, offer other cash-out methods.
Futures ETFs do not hold actual bitcoin. Instead, they use bitcoin futures contracts to gain exposure to the cryptocurrency. A bitcoin futures contract allows investors to speculate and bet on the future price of the asset.
They are subject to the regulatory standards of financial markets and can offer a layer of security and transparency not always present in direct crypto investing. However, investing in a bitcoin ETF does not eliminate the risks associated with the underlying asset: bitcoin.
By investing in BTC through an ETF provider, investors are taking a trip across a one-way bridge. They don't actually own the asset directly, they own an interest in a fund that owns the asset directly. Overall, the major loss investors take when investing in a bitcoin ETF is the benefit of self-sovereignty.
The main advantage of investing in Bitcoin ETFs (Exchange-Traded Funds) is that it provides a way for investors to gain exposure to Bitcoin without directly owning the cryptocurrency.
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