Bitcoin ETFs provide a simple way to understand Bitcoin market trends without the complexity of directly owning the cryptocurrency. In this guide, you’ll discover the best Bitcoin ETFs to buy, factors to consider when choosing, and how to invest effectively through a brokerage platform.
What is a Spot Bitcoin ETF?
Bitcoin exchange-traded funds (ETFs) allow you to invest in Bitcoin without directly owning the cryptocurrency. So instead of buying Bitcoin yourself, you buy shares in a fund that holds actual Bitcoin. If you want to buy BTC, check out our list Top Bitcoin Exchanges.
In particular, a spot Bitcoin ETF is an investment fund that holds actual Bitcoin rather than Bitcoin futures or other derivatives. This means that the price of a spot Bitcoin ETF closely tracks the market value of Bitcoin. Additionally, one of the main advantages of these ETFs is their ease of acquisition. You can buy stocks through a regular brokerage account, no need to set up complicated Cryptocurrency wallet or private key.
Top Spot Bitcoin ETFs
This table provides a snapshot of some of the top spot Bitcoin ETFs on the market. Listed ETFs are actively managed, manage a wide range of assets, and have varying expense ratios (Source: coin glass).
| rank | ETF code | ETF name | yield(%) | Assets under management (AUM) | Expense Ratio (Expenses) |
| 1 | it will go | iShares Bitcoin Trust ETF | 5.26% | $57.69B | 0.25% |
| 2 | Forbitt | Fidelity Wise Origins Bitcoin Fund | 2.07% | $21.99B | 0.25% |
| 3 | GBTC | Grayscale Bitcoin Trust ETF | 1.70% | $22.44B | 1.50% |
| 4 | ARKB | ARK 21Shares Bitcoin ETF | 3.32% | $5.25B | 0.21% |
| 5 | BITB | Bitwise Bitcoin ETF | 2.64% | $4.45B | 0.20% |
| 6 | Bitcoin | Grayscale Bitcoin Mini Trust ETF | 3.25% | $4.29B | 0.15% |
| 8 | long term holding | VanEck Bitcoin ETF | 1.83% | $1.47B | 0.25% |
How to Choose the Best Spot Bitcoin ETF
There are some key criteria to keep in mind when choosing the best spot Bitcoin ETF. Here’s a detailed description of what you should look at:
- Cost ratio: A lower expense ratio means you pay less in Bitcoin ETF fees, leaving more of your money working for you. Small differences in fees do add up over time, so they’re worth considering when choosing an ETF.
- Assets under management (AUM): Higher AUM generally means the ETF is mature and popular with investors. It also makes ETFs more liquid, meaning it’s easier to buy and sell shares without affecting the price. Additionally, a larger AUM shows that the fund has the support and confidence of many investors, which can give you peace of mind.
- Tracking error: Tracking error measures how well an ETF’s performance matches Bitcoin’s actual price movements. The smaller the tracking error, the better, since you want your investments to reflect the true market value of Bitcoin. Serious tracking errors can mean you are not able to fully benefit from Bitcoin price fluctuations.
- Liquidity: Liquidity refers to the ease with which you can buy and sell shares of a Bitcoin ETF without having too much of an impact on its price. The more liquid an ETF is, the less likely you are to face delays or price slippage when entering or exiting a position.
- Fund manager’s reputation and credibility: The reputation of a fund manager is crucial because you want to know that your investments are being well managed. Reputable and trustworthy fund managers follow strict regulatory guidelines and have a track record of handling funds responsibly.
- Dividend Yield: While Bitcoin itself does not generate dividends, some ETFs may earn income by lending or staking Bitcoin. If an ETF provides income, then it can be a nice added bonus. Always check whether the dividend yield is sustainable and meets your investment objectives, as it’s not always guaranteed.
How to buy spot Bitcoin ETF?
Step 1. Choose a reliable brokerage platform
To invest in spot Bitcoin ETFs, you need access to a brokerage account that supports ETFs. Established platforms such as FidelitySchwab or other prime broker ETFs (including spot Bitcoin ETFs) are usually listed once they become available in your area.
Step 2: Open and Fund Your Brokerage Account
If you don’t have a brokerage account yet, please complete the necessary registration steps to create one. This involves providing Personal information, verify your identity and link your bank account. Deposit funds into your account and prepare for your investment.
Step 3: Research available spot Bitcoin ETFs
Spot Bitcoin ETFs may vary by provider, fees and market performance. Therefore, review the ETF’s prospectus to understand its structure, underlying Bitcoin holdings, and associated costs. Leading vendors often provide transparent insights into their operations and hosting solutions.
Step 4. Place order
Once you decide to buy an ETF, search your brokerage platform for its ticker symbol. Enter the number of shares you want to purchase and view order details such as price and fees. Confirm your purchase to complete the transaction.
Step 5: Monitor your investments
After purchasing, track the ETF’s performance through your brokerage platform. Understand market trends and Bitcoin price as it directly affects the value of the ETF. Additionally, adjust your investment strategy as needed.
What is a Bitcoin Strategy ETF?
The Bitcoin Strategy ETF is a fund designed to provide exposure to Bitcoin without directly holding the cryptocurrency. These ETFs are designed to indirectly reflect Bitcoin’s price movements and have been on the market even before spot Bitcoin ETFs were approved.
Most Bitcoin strategy ETFs focus on investing in Bitcoin futures contracts, while some allocate assets to stocks of companies involved in Bitcoin mining. However, because these investments do not involve holding actual Bitcoin, the performance of these funds can often differ significantly from Bitcoin’s market returns.
Top Bitcoin Strategy ETFs Ranked by Fees
| BTC Strategy ETFs and Ticker Tickers | cost | investment methodology |
| Global X Blockchain and Bitcoin Strategy ETF (BITS) | 0.65% | Mainly holds Bitcoin futures and participates in blockchain investments through Global X Blockchain ETF (BKCH) |
| Valkyrie Bitcoin Miner ETF (WGMI) | 0.75% | Stocks of companies involved in Bitcoin mining |
| Bitwise Bitcoin Strategy Best Rolling ETF (BITC) | 0.92% | Bitcoin Futures |
| ProShares Bitcoin Strategy ETF (BITO) | 0.95% | Bitcoin Futures |
| Bitwise Bitcoin and Ethereum Equal Weight Strategy ETF (BTOP) | 0.95% | Bitcoin Futures |
| Valkyrie Bitcoin & Ethereum Strategy ETF (BTF) | 1.24% | Bitcoin and Ethereum futures. |
Are Bitcoin ETFs worth investing in?
Yes, Bitcoin ETFs are worth investing in, but it depends on your goals. If you’re curious about Bitcoin but don’t want to go through the hassle of managing a wallet or protecting your cryptocurrency, ETFs make it easier. They allow you to invest through a traditional brokerage account and are regulated, giving you peace of mind.
However, keep in mind that Bitcoin ETFs typically invest in futures or related assets, so their performance may not exactly match the price of Bitcoin. If you believe in Bitcoin’s long-term potential and prefer simplicity over direct ownership, a Bitcoin spot ETF may be a convenient option to explore.
in conclusion
All in all, the best Bitcoin ETF for your portfolio depends on factors such as fees, liquidity, and AUM. iShares Bitcoin Trust (IBIT) and Fidelity Wise Origin Bitcoin Fund (FBTC) are strong contenders, but it’s important to evaluate your investment goals before making a decision.
The best BTC ETFs simplify your investment in Bitcoin without having to deal with direct ownership and security risks. So think carefully about your priorities and choose ones that align with your long-term success strategy.
FAQ
Are spot Bitcoin ETFs better than futures Bitcoin ETFs?
Spot Bitcoin ETFs hold actual Bitcoin, so they can track its price more accurately, which is useful if you’re investing for the long term. Futures Bitcoin ETFs, on the other hand, use contracts tied to the price of Bitcoin, which can lead to mismatches, especially over time. They are more suitable for active traders or short-term strategies.
Spot ETFs also avoid the additional cost of “rolling” futures contracts, which can eat into profits. So if you want simplicity and price accuracy, spot ETFs are your best choice. For a quick transaction? Futures ETFs may work better.
What are the best ETFs to buy Bitcoin?
The best ETFs for Bitcoin investment are:
- IBIT – iShares Bitcoin Trust: It has an impressive 5.26% market share, total assets of $57.69 billion, and fees as low as 0.25%.
- FBTC – Fidelity Wise Origin Bitcoin Fund: manages a 2.07% market share, $21.99 billion in assets, and an equally affordable 0.25% fee.
Which Bitcoin ETF has the lowest fees?
Grayscale Bitcoin Mini Trust ETF Stands out for its incredibly low fees 0.15%making it one of the most cost-effective options for Bitcoin exposure.
Are there custody risks for spot Bitcoin ETFs?
Yes, they have hosting risks. Spot Bitcoin ETFs store real Bitcoin, which means they rely on a custodian to keep it safe. If the custodian is not secure, there is a risk of hacking, theft, or even operational error.
However, most ETFs work with reputable custodians who use advanced security measures such as cold storage and insurance. When choosing an ETF it’s worth checking who the custodian is. Today, most digital currency ETFs have been approved by the U.S. Securities and Exchange Commission. While no system is perfect, regulatory oversight and top safety practices can help reduce risk.
