Before 2024, gaining exposure to Bitcoin (BTC) in a standard brokerage account typically meant choosing between closed-ended trusts or Bitcoin futures exchange-traded funds (ETFs).
Each of these options came with its drawbacks: closed-ended trusts often came with high costs and the potential to trade at significant discounts or premiums to the net asset value (NAV), while futures ETFs did not perfectly mirror the live, or spot, price of Bitcoin, leading to potential tracking errors.
This landscape underwent a significant transformation on Jan. 10 of this year, when the U.S. Securities and Exchange Commission (SEC) approved the launch of several spot Bitcoin ETFs.
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These ETFs allow for direct investment in Bitcoin, with shares that can be bought and sold in a regular brokerage account just like stocks. They operate using a cash creation mechanism, simplifying the process of gaining exposure to the actual spot price of Bitcoin for investors.
The timing coincided with growing excitement around Bitcoin’s upcoming “halving” event in April — an automatic adjustment to the network that cuts the reward for mining new blocks in half, effectively reducing the rate at which new Bitcoin is generated. This scarcity mechanism has historically led to increased interest and price surges.
True to form, Bitcoin’s price soared, setting a new all-time high of $73,794 on March 14, both in anticipation of the halving and on the heels of momentum from investor inflows to the new ETFs. Inflows to these Bitcoin ETFs require the funds to purchase more Bitcoin to issue shares and meet demand.
Here’s an overview of the 11 new spot Bitcoin ETFs investors can now buy in 2024:
| ETF | Current Expense Ratio | Fee waiver? |
| Grayscale Bitcoin Trust ETF (ticker: GBTC) | 1.5% | No. |
| iShares Bitcoin Trust (IBIT) | 0.12% to 0.25% | Yes. Waiver to 0.12% until January 2025 for first $5 billion in AUM, then 0.25%. |
| Bitwise Bitcoin ETF (BITB) | 0% to 0.2% | Yes. Waiver on first $1 billion in AUM until July 11, then 0.2% |
| ARK 21Shares Bitcoin ETF (ARKB) | 0.21% | No. |
| Fidelity Wise Origin Bitcoin Fund (FBTC) | 0% | Yes. Goes to 0.25% on Aug. 1. |
| Invesco Galaxy Bitcoin ETF (BTCO) | 0% | Yes. Waiver on first $5 billion in AUM through July 10, then 0.25%. |
| VanEck Bitcoin Trust (HODL) | 0% | Yes. Waiver on first $1.5 billion in AUM through March 31, 2025, then 0.2%. |
| The Valkyrie Bitcoin Fund (BRRR) | 0% | Yes. Goes to 0.25% on April 11. |
| Franklin Bitcoin ETF (EZBC) | 0% | Yes. Through Aug. 2 for first $10 billion in AUM, then 0.19%. |
| WisdomTree Bitcoin Fund (BTCW) | 0% | Yes. Waiver for first $1 billion in AUM, then 0.25% |
| Hashdex Bitcoin ETF (DEFI) | 0.90% | No. |
Grayscale Bitcoin Trust ETF (GBTC)
GBTC started out as a closed-ended trust but was converted into an ETF following SEC approval. As the oldest fund in this niche, GBTC holds more than $23 billion in assets under management, or AUM. However, the ETF has shrunk significantly, with around $6 billion in net outflows over the past month.
The likely reason? A high expense ratio of 1.5%, a legacy from GBTC’s history as the dominant close-ended Bitcoin fund when spot ETFs were still unavailable. To remedy this, Grayscale has filed to launch a lower-cost spinoff of GBTC at a later date, called the Grayscale Bitcoin Mini Trust, with the ticker “BTC.”
iShares Bitcoin Trust (IBIT)
Few ETFs in BlackRock Inc.’s (BLK) lineup of 428 ETFs have seen the rapid growth IBIT has experienced. As of March 22, the ETF had swelled to more than $15.4 billion in AUM, largely thanks to recognition of the iShares brand and a competitive 0.25% expense ratio, contractually waived down to 0.12% for the first $5 billion in AUM. This break goes away Jan. 11, 2025, when IBIT owners will simply pay 0.25% instead of the current blended, lower rate.
So far, IBIT has been successful at providing retail investors with liquid Bitcoin exposure. Over the last 30 days, the ETF recorded a low median bid-ask spread of just 0.03%, with an average of 64 million shares traded over that period per day.
Bitwise Bitcoin ETF (BITB)
Prospective investors who prefer the expertise of a dedicated digital asset manager over a “big box” fund provider like BlackRock may prefer BITB. Managed by Bitwise, this ETF comes from a firm solely focused on cryptocurrency. So far, BITB sits at around $2.1 billion in AUM.
BITB started out with a 0.2% expense ratio, but that is being waived to 0% on the ETF’s first $1 billion in AUM until July 11. Notably, Bitwise also made headlines for publishing BITB’s public Bitcoin address, allowing everyone to verify its holdings and track transactions.
ARK 21Shares Bitcoin ETF (ARKB)
Cathie Wood and ARK Invest, known for its popular lineup of actively managed thematic funds such as the ARK Innovation ETF (ARKK) have also entered the spot Bitcoin ETF race. The firm now offers ARKB in partnership with digital assets specialist 21Shares at a 0.21% expense ratio. ARKB had offered a total fee waiver until July 10 or until it reached $1 billion in AUM, whichever occurs first. The fund has blown by that AUM figure and thus now charges a modest expense ratio.
The fund has grown since its inception to around $2.7 billion in AUM, a respectable size for a boutique fund provider. It is listed on the CBOE BZX exchange and has offered decent liquidity since its debut, with a 30-day median bid-ask spread of 0.06% and around 3 million shares traded daily.
Fidelity Wise Origin Bitcoin Fund (FBTC)
While Vanguard stirred up controversy by refusing to launch its own spot Bitcoin ETF or make them available for trading on its brokerage platform, Fidelity had no such concerns. The firm actually launched its own spot Bitcoin ETF in the form of FBTC on the BATS exchange.
Like many of the other spot Bitcoin ETFs, FBTC is currently implementing a fee waiver. The usual 0.25% expense ratio is being reduced down to 0% until Aug. 1. The ETF also has a Canadian-listed variant launched earlier in November 2021 called the Fidelity Advantage Bitcoin ETF (FBTC.TO).
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Invesco Galaxy Bitcoin ETF (BTCO)
“In addition to offering a simpler, more familiar access point to Bitcoin, BTCO brings together the unparalleled expertise of a veteran ETF provider like Invesco and an established crypto native like Galaxy,” says Kathy Kriskey, senior ETF strategist at Invesco.
BTCO’s expense ratio sits at 0.25%, the same as FBTC. To better compete with rivals, BTCO is also waiving fees down to 0% until at least July 10. This ETF is traded on the Chicago Board Options Exchange and has accumulated just $323 million in AUM, making it a bit of a laggard in terms of inflows.
VanEck Bitcoin Trust (HODL)
In December 2013, user “GameKyuub” created a thread on cryptocurrency forum “Bitcointalk” with the title “I AM HODLING,” an apparent misspelling of the word “holding.” Since then, the term “HODL” has been adopted by cryptocurrency enthusiasts as a rallying cry to hold long-term despite high volatility.
As a marketing move, ETF issuer VanEck has also adopted the term for the ticker symbol of its new spot Bitcoin ETF. HODL currently has a waiver on its 0.2% expense ratio in place on the first $1.5 billion in assets through the end of March 2025. So far, it has attracted around $576 million in AUM. VanEck also indicates that it expects options to be available at a later date.
The Valkyrie Bitcoin Fund (BRRR)
VanEck isn’t the only fund manager to embrace cryptocurrency pop culture-themed ticker naming conventions. Another spot Bitcoin ETF to watch here is BRRR, which possibly derives its ticker from the humorous sound of money being printed by central banks, a scenario some Bitcoin purists mock.
The ETF’s sponsors, Valkyrie Digital Assets LLC and CoinShares Co., are both dedicated digital assets firms. Shares of BRRR are traded on the Nasdaq, with the underlying Bitcoin held in cold storage with Coinbase Global Inc. (COIN) as the custodian. Investors can expect a 0.25% expense ratio when the fee waiver expires on April 11.
Franklin Bitcoin ETF (EZBC)
Franklin Templeton lists “simplified access” as one of the main selling points of its spot Bitcoin ETF, stating that the fund is “convenient and cost-effective, lowering the barrier of entry into the crypto market.” Appropriately, the ETF is named “EZBC,” which sounds like “easy Bitcoin.”
EZBC’s underlying holdings currently total more than 4,800 Bitcoin held in custody with Coinbase Global and audited by PricewaterhouseCoopers, or PwC. The ETF’s benchmark is the CME CF Bitcoin Reference Rate — New York Variant. Investors can expect a 0.19% expense ratio, waived down to 0% on the first $10 billion in AUM through Aug. 2. EZBC is currently nowhere near that threshold, with net assets around $330 million.
WisdomTree Bitcoin Fund (BTCW)
WisdomTree’s global AUM spans some $106 billion, with around $77 billion of that being U.S.-listed. Currently, some of the firm’s most popular ETFs by AUM include the WisdomTree Floating Rate Treasury Fund (USFR) and the WisdomTree U.S. Quality Dividend Growth Fund (DGRW).
As of Jan. 11, WisdomTree also offers a spot Bitcoin ETF in the form of BTCW. BTCW is waiving its 0.25% expense ratio down to 0% until July 11 on the first $1 billion in AUM. So far, BTCW has accrued around $77 million in AUM since inception on Jan. 11.
Hashdex Bitcoin ETF (DEFI)
Prior to March 27, DEFI only held Bitcoin futures. However, the ETF has now been converted to a spot Bitcoin ETF, tracking the Nasdaq Bitcoin Reference Price — Settlement index as its benchmark. Now, the ETF will aim to hold at least 95% of its assets in spot Bitcoin, with the remaining 5% to be held in either CME-traded Bitcoin futures contracts or cash and cash equivalents.
Originally, DEFI was the world’s first Bitcoin futures ETF launched as a commodity pool. During its time as a Bitcoin futures ETF, DEFI charged a 0.94% expense ratio, a high fee that reflected the cost and complexity of trading cryptocurrency derivatives. With the change in strategy, it is possible Hashdex may now be able to lower expense ratios to better compete with the previous spot Bitcoin ETFs. Its current expense ratio is listed as 0.9%, and the fund has some catching up to do, with just $11 million in net assets.
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11 New Spot Bitcoin ETFs to Buy in 2024 originally appeared on usnews.com
Update 03/28/24: This story was previously published at earlier date and has been updated with new information.
