Are you also excited about the potential of Bitcoin, but daunted by its complex storage methods and the security of exchanges? Imagine if investing in Bitcoin could be as simple and secure as buying and selling stocks. How great would that be?
This is the purpose behind the creation of the Spot Bitcoin ETF. On January 10, 2024, the U.S. Securities and Exchange Commission (SEC) historically approved the first batch of Spot Bitcoin ETFs. This is not only a milestone for the cryptocurrency market but also opens a brand new door to Bitcoin investment for global investors, especially our friends in Taiwan and Malaysia.
Let’s use a simple analogy to understand:
Core Difference: A Spot Bitcoin ETF is genuinely backed by physical Bitcoin. Each share of the ETF corresponds to real, custodied Bitcoin held in a vault.
Why is the global capital market so excited about Bitcoin Spot ETFs? Because it solves three major pain points for retail investors:
Of course, all investments come with risks, and Bitcoin Spot ETFs are no exception:
With a dazzling array of Bitcoin Spot ETFs on the market, how do you choose? Here, we have selected 5 of the most representative and closely watched products on the market for an in-depth comparison.
Issued by BlackRock, the world’s largest asset management company, the BlackRock Bitcoin ETF ticker is IBIT. With its strong brand reputation, substantial financial backing, and highly competitive initial fees, IBIT has rapidly attracted a massive inflow of funds since its launch, becoming the most iconic Bitcoin Spot ETF on the market. For investors who prioritize stability and trust in major brands, IBIT is undoubtedly the top choice.
Fidelity is another asset management giant, and its FBTC fund closely follows IBIT in terms of scale and liquidity. Fidelity has been involved in the cryptocurrency space for a long time, with its own digital asset custody and research teams, and its expertise is highly recognized. The healthy competition between FBTC and IBIT has also resulted in lower fees and better products for investors.
Grayscale’s GBTC is a veteran in the market, having converted from a trust fund to a spot ETF. Its biggest advantage is its enormous assets under management (AUM), which translates to excellent liquidity. However, GBTC’s management fee is relatively high, a key factor for investors to consider. It will be interesting to see if Grayscale will lower its fees in the future to compete.
To give you a clearer comparison, we have compiled the following table (Note: Fees and scale are dynamic data, please refer to the latest official information):
| ETF Ticker | Issuer | Expense Ratio | Features |
|---|---|---|---|
| IBIT | BlackRock | ~0.25% (Often with initial waivers) | Issued by the world’s largest asset manager, high brand trust, strong capital inflow. |
| FBTC | Fidelity | ~0.25% | Asset management giant with deep involvement in digital assets, high level of expertise. |
| GBTC | Grayscale | ~1.50% | Largest scale, best liquidity, but higher fees. |
| ARKB | ARK / 21Shares | ~0.21% | Backed by Cathie Wood’s star power, favored by tech investors. |
| BITB | Bitwise | ~0.20% | Crypto index fund specialist, competitive fees. |
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If you’re in Taiwan or Malaysia and want to invest in these U.S.-listed Bitcoin ETFs, there are mainly two channels. Here’s a detailed analysis of their pros and cons.
This is the most direct and cost-effective method. By opening an account with a well-known overseas broker (e.g., Firstrade, TD Ameritrade, Interactive Brokers), you can trade these ETFs directly on the U.S. market.
Brief Steps:
“Sub-brokerage” means you place an order through a domestic broker, who then delegates the trade to an overseas partner broker. In simple terms, it’s your “investment purchasing agent.”
Currently, the stance of Taiwan’s FSC is to “prohibit” domestic securities investment trust companies from issuing or introducing Bitcoin Spot ETFs. It also “does not permit” brokers to proactively recommend these products to clients through sub-brokerage. However, this does not mean that investors cannot invest through overseas brokers on their own.
In simple terms, the regulator’s attitude is: We don’t encourage it, but if you have your own means and channels to invest overseas, it is not currently prohibited. Investors must bear the relevant risks themselves and understand the tax regulations for overseas investments.
In addition to spot ETFs that directly track the price of Bitcoin, there are other crypto ETFs with different strategies on the market, making investment portfolios more flexible.
When you expect the price of Bitcoin to fall, an Inverse Bitcoin ETF is the tool for you. For example, the ProShares Short Bitcoin Strategy ETF (ticker: BITI) aims to provide the “inverse” of the daily return of a Bitcoin futures index. This means if Bitcoin futures fall by 1%, the net asset value of BITI should theoretically rise by 1% (before fees and compounding effects).
Note: Inverse ETFs are high-risk, short-term trading instruments and are not suitable for long-term holding due to their daily reset feature.
After Bitcoin, the market’s next focus is undoubtedly the “Ethereum Spot ETF.” With the development of blockchain technology, we may also see the emergence of crypto ETFs that track a basket of cryptocurrencies or specific sectors (like DeFi, GameFi), providing investors with more diverse options.
The advent of the Bitcoin Spot ETF is undoubtedly a key step for cryptocurrency moving into the mainstream financial market. It provides ordinary investors like you and me with a safer, more convenient, and more compliant channel to participate in the value growth of Bitcoin. This article has broken down the core concepts of Bitcoin Spot ETFs and provided a detailed comparison of the 5 mainstream ETFs, led by BlackRock’s IBIT, which should help you make a more informed decision.
For investors in Taiwan and Malaysia, using an overseas U.S. stock broker is currently the most cost-effective investment method. Before taking your first step in investing, be sure to carefully assess your own risk tolerance and conduct thorough research. The cryptocurrency market is full of opportunities but also accompanied by volatility. Being prepared is the only way to navigate this digital wave steadily. Happy investing!
The Bitcoin Spot ETF issued by BlackRock is listed on the NASDAQ exchange under the ticker symbol IBIT.
Yes. For investments in U.S. stock ETFs through an overseas broker, the capital gains are considered overseas income. According to Taiwanese tax law, if your total annual overseas income exceeds NT$1 million, you must declare it. If your total basic income (including this overseas income) exceeds NT$6.7 million (this threshold may change), you will be subject to the alternative minimum tax. Dividends are subject to a 30% withholding tax. It is recommended to consult a professional accountant for the most accurate information.
Not directly. You own “shares” of the ETF, and the ETF issuer (like BlackRock) acts on behalf of all shareholders to purchase and hold an equivalent value of Bitcoin as reserves. You can think of it as owning a “Bitcoin claim ticket.” You benefit from its value fluctuations, but you cannot directly transfer the Bitcoin to your own wallet. The advantage of this model is security and convenience; the disadvantage is the loss of direct control over the Bitcoin.
The competition over management fees for Bitcoin Spot ETFs is very fierce. Currently, the annual fees for mainstream products range from about 0.20% to 0.30%. However, many issuers offered fee waivers or reductions at launch, such as waiving management fees for the first six months or for the first few billion dollars in assets. Older products like GBTC may have fees as high as 1.5%. Be sure to compare the latest official fee information when choosing.
