Investing in Bitcoin has always been a hot topic for investors looking to capitalize on the cryptocurrency market. However, for many, the process of investing directly in Bitcoin has been a challenge. In the past, investors in the US were limited to indirect exposure through futures or options when it came to Bitcoin ETFs. This changed in January 2024 when the SEC approved 11 new spot Bitcoin ETFs, providing investors with a more direct way to invest in Bitcoin through the stock market.
Spot Bitcoin ETFs allow investors to buy shares in an ETF that holds actual Bitcoin in its reserves, offering a way to invest in Bitcoin without owning the cryptocurrency itself. This setup closely tracks the price of Bitcoin, providing a straightforward option for those looking to get in on the action. In comparison, futures-based Bitcoin ETFs use contracts to bet on Bitcoin’s price in the future, offering exposure to Bitcoin but not tracking its price as accurately as spot ETFs do.
When it comes to choosing the best spot Bitcoin ETFs in the US, there are three key factors to consider: management fees, fund size, and provider reputation. Lower fees can lead to better returns over time, so it’s essential to look for ETFs with competitive expense ratios. Additionally, larger funds with higher assets under management and daily trading volumes are generally more stable and easier to trade. Lastly, considering the reputation of the ETF provider is crucial, as established companies with a track record of managing similar funds are likely to offer more reliable and secure options.
Here are six of the best spot Bitcoin ETFs currently available in the US:
1. iShares Bitcoin Trust ETF (IBIT): With a low fee of 0.12% for the first $5 billion in assets, this ETF is one of the largest newly approved spot Bitcoin ETFs with $22 billion in assets under management.
2. Grayscale Bitcoin Trust (GBTC): Priced at $74.88 per share and with $14 billion in assets, this ETF offers a solid option for investors looking for exposure to Bitcoin.
3. Bitwise Bitcoin ETF (BITB): Managed by Bitwise Asset Management, this ETF has quickly gathered $2.3 billion in assets with a low sponsor fee of 0.20%.
4. ARK 21Shares Bitcoin ETF (ARKB): With a market price of $94.36 per share and $3 billion in assets, this ETF offers a competitive management fee of 0.21%.
5. VanEck Bitcoin Trust (HODL): Priced at $106.77 per share, this ETF has $680 million in assets under management and an expense ratio of 0.20%.
6. Invesco Galaxy Bitcoin ETF (BTCO): With a market price of $92.67 per share and over $490 million in assets, this ETF offers a standard fee of 0.25%.
Investors looking to invest in Bitcoin through ETFs should consider factors such as fees, fund size, and provider reputation to find the best fit for their investment goals. The approval of spot Bitcoin ETFs in the US has made it easier for investors to access the cryptocurrency market, providing a more direct and transparent way to invest in Bitcoin.
