Are you curious about the incredible potential of Bitcoin but feel overwhelmed by complex account opening processes, and baffled by jargon like “cold wallets” and “private keys”? Have concerns about fund security kept you on the sidelines? Congratulations, your investment dilemma has been solved in 2024! The U.S. Securities and Exchange Commission (SEC) officially approved “Spot Bitcoin ETFs” early this year, opening a new, secure, and convenient gateway to the world of cryptocurrency for investors like us.
This article is your ultimate beginner’s guide. We’ll explain “what a Bitcoin ETF is” in the simplest terms, provide the latest “Bitcoin ETF tickers“, and finally, offer a step-by-step guide on “how to buy a Bitcoin ETF“. Ready? Let’s unveil the mystery together!
Imagine you want to invest in gold but don’t want to hoard a pile of gold bars at home, worrying about theft and storage. In this case, you can buy a “Gold ETF” on the stock market. This ETF is managed by a professional institution that holds physical gold. Each share of the ETF you buy represents indirect ownership of a small portion of that gold. The trading process is as simple as buying and selling shares of Apple or Google.
The principle of a Bitcoin ETF is exactly the same! A Bitcoin ETF (Exchange-Traded Fund) is a fund traded on traditional stock exchanges. The fund manager actually buys and holds a large amount of Bitcoin as an asset, then issues corresponding fund shares (stocks), allowing investors to buy and sell them directly in the stock market through their brokerage accounts.
In simple terms, you are not buying the “Bitcoin” coin itself, but “shares of a fund that holds Bitcoin”. You don’t need to register on a cryptocurrency exchange, worry about how to use a wallet, or risk losing your private key or having it stolen. All the complex operations and asset custody are handled by world-class asset management companies like BlackRock and Fidelity.
Before the approval of these “Spot ETFs,” “Futures ETFs” already existed in the market. The two are worlds apart, which is why this new development has caused such a stir. We can compare them to buying a house:
Therefore, the SEC’s approval of Spot Bitcoin ETFs signifies that the traditional financial market finally has an investment tool that can accurately reflect the value of Bitcoin. This is a milestone achievement!
The 3 Major Advantages of Investing in Bitcoin ETFs
Since the SEC gave the green light, Wall Street giants have rushed to launch their own Spot Bitcoin ETFs, sparking a fierce “expense ratio price war.” This is absolutely fantastic news for us investors! The lower the fee, the lower our investment cost.
To help you compare, CashbackIsland has compiled the core information for the 11 most mainstream Spot Bitcoin ETFs currently on the market, so you can see everything at a glance!
| ETF Ticker | Issuer | Current Expense Ratio | Fee Waiver/Discount Information |
|---|---|---|---|
| IBIT | iShares (BlackRock) | 0.25% | Rate lowered to 0.12% for the first 12 months or until assets reach $5 billion. |
| FBTC | Fidelity | 0.25% | Fee waived until 7/31/2025. |
| ARKB | ARK 21Shares | 0.21% | Fee waived for the first 6 months or until assets reach $1 billion. |
| BITB | Bitwise | 0.20% | Fee waived for the first 6 months or until assets reach $1 billion. |
| GBTC | Grayscale | 1.50% | None, currently the highest fee ETF. |
| HODL | VanEck | 0.20% | Fee reduction plan available, see official website for details. |
| BRRR | Valkyrie | 0.25% | Fee waived for the first 3 months. |
| EZBC | Franklin Templeton | 0.19% | Currently one of the lowest fees. |
| BTCO | Invesco Galaxy | 0.39% | Fee waived for the first 6 months or until assets reach $5 billion. |
| DEFI | Hashdex | 0.90% | Relatively high. |
| BTCW | WisdomTree | 0.30% | Fee waived for the first 6 months or until assets reach $1 billion. |
*Note: Fee information is subject to change. Please refer to the official announcements from the issuers.
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Want to dive deeper into the world of ETF investing?
Faced with so many choices, how do you pick? Don’t worry, just stick to two core principles:
Now that you understand the theory, it’s time for practical application! The process of buying a Bitcoin ETF is really as simple as buying any U.S. stock. We’ve broken it down into three steps—just follow along!
To buy an ETF listed in the U.S., you first need a U.S. stock brokerage account. For investors in Mainland China, Hong Kong, Macao, or Taiwan, there are two main options:
For those planning to invest long-term or trade frequently, opening an account with an overseas broker is the most cost-effective choice.
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Once your account is open, the next step is to deposit money into it. This process is called “funding.”
If you’re using an overseas broker, you’ll typically need to make an international wire transfer from your bank. You will need the receiving bank information provided by your broker (such as bank name, SWIFT Code, your unique account number, etc.), and then complete the transfer at your bank counter or through online banking. Although there will be a wire transfer fee (usually around $30-50 USD), this one-time cost is worthwhile for the lower trading costs later on.
If you are using a sub-brokerage service, the process is much simpler, as funds are typically debited directly from your local currency or foreign currency settlement account.
Once the funds have arrived, it’s time for the most exciting step! Log in to your broker’s app or trading platform:
Once the order is filled, congratulations! You are now officially a holder of a Bitcoin ETF, ready to participate in the growth potential of this emerging asset!
In summary, the arrival of Spot Bitcoin ETFs is undoubtedly a key step for cryptocurrency moving into the mainstream financial market. It completely solves the three main pain points for ordinary investors who want to invest in Bitcoin but are “afraid of the hassle,” “afraid of being scammed,” and “afraid of not understanding it.”
Through this guide, from the basic concept of “what a Bitcoin ETF is,” to a detailed list of the 11 “Spot Bitcoin ETF” tickers, and a practical tutorial on “how to buy a Bitcoin ETF,” you should now have a comprehensive understanding of this new investment favorite. It provides a regulated, low-cost, and highly secure channel for you to incorporate the high-potential emerging asset of Bitcoin into your investment portfolio in a familiar way, diversifying risk and capturing future trends.
Investment always comes with risks, but after doing your homework and understanding the product, taking that brave first step is how you seize new opportunities. Now, start your Bitcoin investment journey by choosing a suitable U.S. stockbroker!
Absolutely. First, Bitcoin itself is an asset with extremely high price volatility, which means the ETF’s net asset value (NAV) will also fluctuate dramatically. You must be mentally prepared to withstand high volatility. Second, although the ETF will do its best to track the price of Bitcoin, a slight “tracking error” may still exist. Finally, this is still a relatively new market, and future changes in regulatory policies could also impact its price.
Yes, you can. As long as your domestic broker offers a U.S. stock sub-brokerage service, you should theoretically be able to place orders for these U.S.-listed Bitcoin ETFs. However, you need to be particularly aware that sub-brokerage fees are typically higher and may have a minimum commission, which will erode your investment returns. Be sure to confirm the fee structure with your account manager before placing an order.
There are mainly two layers of fees. The first is the “trading commission” paid to the broker, which depends on the broker you choose. Many overseas brokers offer zero commission, while sub-brokerage services charge a percentage. The second layer is the ETF’s own “internal expense ratio,” which is deducted directly from the fund’s NAV. You won’t feel like you’re paying it directly, but it will affect the ETF’s long-term performance. Therefore, choosing an ETF with a low expense ratio is crucial.
It will be very close, but not 100% identical. The ETF’s market price is determined by supply and demand in the market, while its intrinsic value, the “Net Asset Value” (NAV), is calculated by the total value of the Bitcoin held by the fund divided by the number of shares issued. In most cases, the market price will closely track the NAV, but occasionally, a slight premium or discount may occur due to market sentiment.
No. Traditional stock ETFs pay dividends because the companies they hold distribute profits to shareholders, which the ETF then passes on to its investors. However, Bitcoin is a commodity or asset and does not generate any interest or dividends. Therefore, the only source of return from holding a Bitcoin ETF is the capital appreciation from its price increase.
