20 Bitcoin ETFs and Their Fees, Promotions and Holdings

Being subjected to strict regulation by financial authorities, spot BTC ETF options provide an additional layer of trust and transparency. This regulatory oversight makes them an attractive choice for those wary of the unregulated nature of crypto markets. On the other hand, BTC options can’t be traded in geo-restricted environments where exchanges can’t operate.

Options are contracts between investors that allow them to speculate on the prices of underlying assets. These contracts give traders the right, but not the obligation, to buy or sell shares of the Bitcoin spot ETFs at a specified price and date. A bitcoin’s mathematical problem 2020 spot Bitcoin ETF is an exchange-traded fund that allows traders to gain exposure to Bitcoin without directly owning the asset. Unlike futures-based Bitcoin ETFs such as the ProShares Bitcoin ETF, spot BTC ETFs directly track the price of Bitcoin through physical holdings of the asset.

• In contrast, a spot bitcoin ETF is an open-end fund with a more dynamic share issuance system.
• Shares of the Trust are not deposits or other obligations of or guaranteed by BlackRock, Inc., and its affiliates, and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.
• Bitcoin’s price is notoriously volatile, and investing in an ETF that tracks its price can expose investors to sharp fluctuations in value.
• In this case, each spot Bitcoin fund manages a collection of actual coins.

Understanding Exchange-Traded Funds And Bitcoin

Although large and liquid, however, the elevated fee structure for this bitcoin ETF at present may give some investors cause to shop around. Bitcoin spot ETFs are available through exchanges and if dogecoin is a joke why is elon musk pumping this meme cryptocurrency the brokerages that offer them. Until then, regulators were reluctant to approve any spot Bitcoin ETF applications, citing concerns over market manipulation, fraud, custody, and investor protection. Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance.

Spot ETFs are a much bigger deal as they can lead to more adoption and demand for bitcoin itself, while bitcoin futures ETFs are more of a speculative bet on the future price of bitcoin. Spot bitcoin ETFs make it easier for retail investors and traders to buy and sell an asset tied to the current value of bitcoin without needing to hold bitcoin itself. They also allow investors seeking exposure to bitcoin in retirement accounts to have a much simpler option than opening a self-directed IRA that could hold bitcoin directly. These shares are priced to reflect the current spot price of bitcoin and can be traded on traditional stock exchanges.

A “short” ETF is a risky long-term bet amid inflationary pressures that raise many assets’ prices. In the case of an asset like bitcoin, which has been on a tear, ETFs that are set up to profit from the digital currency’s decline have been painfully punished. Thanks to the friction of levered funds—that is, the combined direct and indirect costs of trading them—you are unlikely to ever get a performance that is exactly twice bitcoin’s performance. But with a gain of about 51% since its June 2023 inception date, it’s hard to argue there isn’t a use for this admittedly aggressive bitcoin major cryptocurrency abbreviations cryptocurrency ETF. Bitwise is one of the lesser-known sponsors on this list, but its Bitwise Bitcoin ETF has some features that make it noteworthy.

That meant it lacked the highly liquid, smooth redemption mechanism that ETFs enjoy. And as a result, shares often traded at a big premium or discount to the actual value of the underlying bitcoin. Investors are understandably reluctant to pay, say, $1 for 90 cents worth of assets. With SEC approval of its conversion to an ETF, GBTC got a level playing field with the other 10 ETFs that won the SEC’s okay to operate. Invesco Galaxy Bitcoin ETF, another spot bitcoin fund, is on our list because of its generous approach to winning new business.

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Meanwhile, BTC options could continue to thrive among crypto-native traders, driven by innovations on decentralized exchanges and the growing popularity of multi-leg strategies tailored for volatile markets. As for Bitcoin options, they provide a more direct connection to BTC itself. Unlike spot BTC ETF options, Bitcoin options on OKX are only settled in Bitcoin instead of stablecoins. Each contract represents the right to buy or sell shares of the ETF at a specific price. For example, if you believe the ETF price will rise, you can purchase a call option.

In return, however, your holdings aren’t truly decentralized, can’t be used to pay for goods and services, could be exposed to tracking errors, and come with trading limitations detailed in the section above. Additionally, ETPs in general are subject to certain regulatory oversight from government agencies. This contrasts with the crypto market, which is currently less regulated. Some investors may feel more confident buying an asset that is subject to regulation.

Bitcoin is a digital currency that enables instant peer-to-peer transfer of value globally without the need for intermediaries (like banks) and at next-to-no-cost. Instead, transactions are sent using blockchain technology, a public ledger that records and verifies transactions securely. All one truly needs to access bitcoin is a device with an internet connection. Owning bitcoin also means you can send the bitcoin to others through the blockchain, or pay for goods and services from vendors who accept it. And while you can technically gift your shares to someone else, it’s not as practical as simply sending friends or family some bitcoin.

BUILD & EVALUATE PORTFOLIOS

Here are ways to invest in bitcoin directly or indirectly without buying a spot bitcoin ETF. The analyst thinks total managed crypto assets will reach $500 billion to $600 billion over the next five years, up from the current $45 billion to $50 billion. In 2021, cryptocurrency traders scored a win when the SEC approved the ProShares Bitcoin Strategy ETF (BITO) – the first crypto ETF on the market that was not tied to stocks.

Top 8 Bitcoin strategy ETFs by fee

Depending on your strategy, this may present challenges—especially if there’s a big drop in price. Nevertheless, in general, the ETPs remove significant hurdles for investors who want exposure to bitcoin. While regulators and issuers went back and forth to iron out details, there were some last-minute glitches. An unauthorized post announcing the approval on social media platform X from the SEC’s account on Tuesday sent bitcoin prices soaring past $48,000 before the regulator clarified that its X account had been compromised.

Do spot Bitcoin ETFs have custodianship risk?

For starters, it’s listed on the New York Stock Exchange’s NYSE Arca platform, which means it is trading on a premier platform for exchange-traded funds. After years of anticipation, the Securities and Exchange Commission finally opened the door to 11 spot bitcoin ETFs in 2024. It remains well over 10 times bigger than the largest of the newcomer spot bitcoin ETFs. Which spot Bitcoin ETF is best depends on your preferences, the difference in fees they charge, and how comfortable you are investing in Bitcoin or Bitcoin funds.