Investors can now seamlessly access spot Bitcoin exposure in their brokerage accounts through these recently approved ETFs.
A groundbreaking move unfolded with the U.S. Securities and Exchange Commission's endorsement of 11 new spot Bitcoin (BTC) ETFs on January 10. This marked a pivotal moment in the cryptocurrency and fund management sectors, deviating from the previous norm where ETFs were limited to Bitcoin futures.
These newly approved ETFs are backed by physical Bitcoin held by a custodian, providing advantages such as reduced tracking error and direct exposure to the cryptocurrency's price movements.
This development comes after a transformative year in 2023, characterized by a resurgent Bitcoin market and a significant legal triumph for Grayscale Investments. Subsequent to these events, ETF providers swiftly adjusted their prospectuses, positioning themselves at the forefront of this new investment opportunity.
The days leading up to the SEC's approval were tense, featuring the compromise of the SEC's Twitter (now X) account. A false approval tweet on Jan. 9 heightened anticipation within the investment community before the official debut of these ETFs.
Following the SEC's approval on Jan. 11, U.S. Bitcoin ETFs witnessed a surge in trading volume to $4.6 billion. Bitcoin itself reached a peak of $48,922 during the trading frenzy, reflecting the market's enthusiastic response to this historic decision. However, within days, it experienced a dip, trading below $42,000.
Grayscale Bitcoin Trust ETF (GBTC)
Originally a closed-ended trust, GBTC, the pioneering Bitcoin fund since 2013, has now transformed into an open-ended ETF. As of Jan. 17, it remains the largest Bitcoin ETF with over $25 billion in assets under management (AUM). However, GBTC faced some net outflows in the initial days of other Bitcoin ETF launches, attributed to its higher expense ratio of 1.5%.
Hashdex Bitcoin Futures ETF (DEFI)
Initially a Bitcoin futures ETF, DEFI underwent a strategy change on Jan. 11 to allow holding spot Bitcoin. DEFI, known for its experienced cryptocurrency industry background, charges a 0.9% expense ratio.
Franklin Bitcoin ETF (EZBC)
Franklin Templeton, renowned for its international equity funds, entered the Bitcoin ETF space with EZBC. Traded on the Chicago Board Options Exchange (CBOE), EZBC tracks spot Bitcoin held by Coinbase Global Inc. It has attracted around $49 million in AUM, with fees waived through Aug. 2 for the first $10 billion in AUM.
VanEck Bitcoin Trust (HODL)
HODL, referencing the "hold on for dear life" motto, has gathered approximately $86 million in AUM as of Jan. 17, with a 0.25% expense ratio. Like DEFI, it is traded on the CBOE, with potential plans for an options chain.
iShares Bitcoin Trust (IBIT)
BlackRock's IBIT, launched on the Nasdaq exchange, has surpassed $1 billion in AUM within a week of its debut. BlackRock reduced its initial 0.25% expense ratio to 0.12% for the first $5 billion in AUM over a 12-month period.
Valkyrie Bitcoin Fund (BRRR)
BRRR, trading on the Nasdaq exchange, is currently waiving its 0.25% expense ratio for the first three months. With Coinbase as its custodian, BRRR has attracted over $62 million in net assets.
Invesco Galaxy Bitcoin ETF (BTCO)
Invesco's BTCO, with around $137 million in AUM, offers familiar access to Bitcoin. Invesco is waiving fees from 0.39% to zero for the first $5 billion in AUM for six months.
WisdomTree Bitcoin Fund (BTCW)
Despite its focus on dividend funds, WisdomTree entered the Bitcoin ETF competition with BTCW. It is waiving its 0.3% expense ratio to zero for the first $1 billion in AUM for six months.
Fidelity Wise Origin Bitcoin Fund (FBTC)
Fidelity's FBTC, not its first spot Bitcoin ETF, benefits from Fidelity's substantial presence. Fidelity has waived FBTC's expense ratio from 0.25% to zero, with plans to reinstate it on Aug. 1.
Ark 21Shares Bitcoin ETF (ARKB)
In collaboration with 21Shares, Ark Invest offers Bitcoin exposure through ARKB. ARKB has attracted $10.3 million in inflows through Jan. 10, waiving its expense ratio temporarily.
Bitwise Bitcoin ETF (BITB)
Bitwise's BITB, listed on the New York Stock Exchange (NYSE), has achieved strong success with $354 million in AUM through Jan. 17. It is temporarily waiving its expense ratio for the first $1 billion in AUM for six months, making it one of the most cost-effective options on this list.
