How to Access Bitcoin ETFs: A Guide for Investors
Now that the U.S. Securities and Exchange Commission has approved the first round of spot Bitcoin ETFs, you may be wondering how to invest in these new products. Exchange-traded products (ETPs) include exchange-traded funds (ETFs), which are investment vehicles traded on exchanges.
A Bitcoin ETF is similar to other ETFs in that it tracks the price of an underlying asset, in this case, Bitcoin. It allows investors to gain exposure to Bitcoin without having to directly hold or store the cryptocurrency themselves.
How Are ETFs Different from Stocks?
ETFs are publicly traded investment vehicles that track the performance of an underlying asset or index, not just one company. They can be thematic or focused on specific sectors or currencies.
What Is a Bitcoin ETF?
A Bitcoin ETF functions like any other ETF. Investors can buy shares in the ETF through a brokerage account, such as Robinhood or eToro. The ETF tracks the current price of Bitcoin, providing investors with exposure to the asset without requiring them to own and store the digital currency.
The SEC has approved 11 spot Bitcoin ETF applications from various issuers.
Where Can You Buy a Bitcoin ETF?
To invest in a Bitcoin ETF, you’ll need a brokerage account. Popular platforms include E-Trade, Fidelity, Robinhood, eToro, and Charles Schwab. However, Vanguard and Merrill Lynch have stated that they will not offer Bitcoin ETF products.
Before trading, sign up for an account on your chosen platform and provide the necessary information. Here are some platforms where you can access specific Bitcoin ETFs:
BlackRock’s iShares Bitcoin Trust: Accessible through a Fidelity brokerage account.
Grayscale Bitcoin Trust (GBTC): Available through Fidelity, Robinhood, E-Trade, Ameritrade, Interactive Brokers, and Charles Schwab.
Fidelity Wise Origin Bitcoin Fund (FBTC): Buy and sell on the Fidelity website.
ARK 21Shares Bitcoin ETF: Purchase through Charles Schwab, Chase, E-Trade, Fidelity, TD Ameritrade, Webull, SoFi, or Robinhood.
Bitwise Bitcoin ETF: Contact Bitwise to open a brokerage account and get started.
Invesco Galaxy Bitcoin ETF (BTCO): Contact Invesco to open a brokerage account and begin trading.
Valkyrie Bitcoin Fund (BTF): Available through Robinhood, E-Trade, Charles Schwab, Fidelity, Pershing, and TD Ameritrade.
VanEck Bitcoin Trust: Purchase through a VanEck advisor or Ally Invest, Charles Schwab, E-Trade, Robinhood, or Fidelity brokerage accounts.
Franklin Bitcoin ETF (EZBC): Consult your Franklin advisor for investment options.
WisdomTree Bitcoin Fund (BTCW): Can be bought through Fidelity, Charles Schwab, E-Trade, or Ally.
Hashdex Bitcoin Futures ETF ($DEFI): Purchase through Robinhood, E-Trade, Fidelity, TD Ameritrade, or Charles Schwab.
The Risks of Investing in Bitcoin ETFs
While the SEC has approved Bitcoin ETFs, Chairman Gary Gensler cautions investors about the risks associated with cryptocurrency investments. Bitcoin networks can be attacked or compromised, and cryptocurrency exchanges are susceptible to hacks, which can lead to price volatility.
Forks, where a network splits into two due to disagreements among developers or miners, have also occurred in Bitcoin’s history. However, Bitcoin ETF issuers have plans in place to address such situations.
Despite the risks, the crypto community is enthusiastic about these new investment opportunities.
Hot Take: The Rise of Bitcoin ETFs
The approval of spot Bitcoin ETFs by the U.S. SEC opens up new avenues for investors to gain exposure to Bitcoin without directly holding the cryptocurrency. These ETFs track the price of Bitcoin and can be purchased through various brokerage accounts. While there are risks associated with cryptocurrency investments, such as network attacks and market volatility, the crypto community is excited about these developments. With more investors gaining access to Bitcoin through ETFs, it will be interesting to see how this affects the overall market and adoption of cryptocurrencies.
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