10 Best Bitcoin ETFs in 2024

Investing in Bitcoin has never been easier, thanks to the rise of Bitcoin ETFs. These innovative financial products allow you to gain exposure to the world’s largest cryptocurrency without the hassle of buying and storing it yourself. Here are 10 Best Bitcoin ETFs in 2024.

1. Grayscale Bitcoin Trust (GBTC)

Grayscale Bitcoin Trust is one of the first and largest Bitcoin ETFs, with over $30 billion in assets under management. GBTC allows investors to gain exposure to Bitcoin without the need to buy, store, or safekeep the cryptocurrency directly. The trust has a annual fee of 2% and trades on the OTCQX market.

Pros:

• Established and reputable fund
• High liquidity
• No need to manage private keys

Cons:

• High premium to net asset value (NAV)
• 2% annual fee.

2. ProShares Bitcoin Strategy ETF (BITO)

ProShares Bitcoin Strategy ETF is the first Bitcoin futures ETF approved by the SEC. BITO invests in Bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME), providing investors with an alternative way to gain exposure to Bitcoin without holding the cryptocurrency directly.

Pros:

• Regulated by the SEC
• Traded on the NYSE Arca exchange
• Lower risk compared to holding Bitcoin directly

Cons:

• Invests in futures contracts, not actual Bitcoin
• Expense ratio of 0.95%.

3. VanEck Bitcoin Strategy ETF (XBTF)

The VanEck Bitcoin Strategy ETF is another Bitcoin futures ETF that began trading in November 2021. Like BITO, XBTF invests in Bitcoin futures contracts traded on the CME, offering investors an indirect way to gain exposure to the cryptocurrency.

Pros:

• Regulated by the SEC
• Lower expense ratio compared to BITO (0.65%)
• Managed by an experienced firm in the cryptocurrency space

Cons:

• Invests in futures contracts, not actual Bitcoin
• Potential for tracking errors.

4. Valkyrie Bitcoin Strategy ETF (BTF)

Valkyrie Bitcoin Strategy ETF is another Bitcoin futures ETF that launched in October 2021. BTF invests in Bitcoin futures contracts traded on the CME and aims to provide investors with an easy way to gain exposure to the cryptocurrency without the complexities of buying and storing it directly.

Pros:

• Regulated by the SEC
• Traded on the Nasdaq exchange
• Managed by a team with deep expertise in digital assets

Cons:

• Invests in futures contracts, not actual Bitcoin
• Higher expense ratio compared to XBTF (0.95%).

5. Bitwise 10 Crypto Index Fund (BITW)

The Bitwise 10 Crypto Index Fund is a diversified cryptocurrency ETF that invests in the top 10 cryptocurrencies by market capitalization, including Bitcoin. BITW aims to provide investors with broad exposure to the cryptocurrency market while mitigating some of the risks associated with investing in individual digital assets.

Pros:

• Diversified exposure to the top 10 cryptocurrencies
• Managed by a team with deep expertise in crypto assets
• Potential for higher returns compared to Bitcoin-only ETFs

Cons:

• Higher expense ratio (2.5%)
• Less liquid compared to Bitcoin-only ETFs.

6. Amplify Transformational Data Sharing ETF (BLOK)

Amplify Transformational Data Sharing ETF is an actively managed ETF that invests in companies involved in the development and utilization of blockchain technologies, including those related to Bitcoin. BLOK provides investors with exposure to the broader blockchain ecosystem, which may benefit from the growth of Bitcoin and other cryptocurrencies.

Pros:

• Exposure to companies involved in blockchain technology
• Actively managed by a team of experienced professionals
• Potential for diversification benefits

Cons:

• Higher expense ratio (0.71%)
• Indirect exposure to Bitcoin.

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7. First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT)

First Trust SkyBridge Crypto Industry and Digital Economy ETF is an actively managed ETF that invests in companies involved in the cryptocurrency and digital economy sector, including those that enable the use of Bitcoin and other digital assets. CRPT aims to provide investors with exposure to the growth potential of the broader cryptocurrency ecosystem.

Pros:

• Exposure to companies involved in the digital economy
• Actively managed by experienced professionals
• Potential for diversification benefits

Cons:

• Higher expense ratio (0.85%)
• Indirect exposure to Bitcoin.

8. Evolve Bitcoin ETF (EBIT)

Evolve Bitcoin ETF is a Canadian-based ETF that provides investors with direct exposure to Bitcoin. EBIT invests in actual Bitcoin, which is held in cold storage by a regulated custodian. This ETF is an option for investors looking for a more direct way to gain exposure to the cryptocurrency.

Pros:

• Direct exposure to Bitcoin
• Regulated by Canadian securities laws
• Lower risk compared to self-custody of Bitcoin

Cons:

• Higher management fee (1%)
• Potential for tracking error

9. CI Galaxy Bitcoin ETF (BTCX)

CI Galaxy Bitcoin ETF is another Canadian-based ETF that invests directly in Bitcoin. BTCX aims to provide investors with a secure and regulated way to gain exposure to the cryptocurrency, with the Bitcoin held in cold storage by a third-party custodian.

Pros:

• Direct exposure to Bitcoin
• Regulated by Canadian securities laws
• Managed by experienced professionals in the digital asset space

Cons:

• Higher management fee (0.95%)
• Potential for tracking error

10. 3iQ CoinShares Bitcoin ETF (BTCQ)

3iQ CoinShares Bitcoin ETF is a Canadian-based ETF that invests directly in Bitcoin, offering investors another option for gaining exposure to the cryptocurrency through a regulated investment vehicle. BTCQ’s Bitcoin holdings are stored with a regulated custodian, providing an additional layer of security.

Pros:

• Direct exposure to Bitcoin
• Regulated by Canadian securities laws
• Managed by a team with expertise in digital assets

Cons:

• Higher management fee (1%)
• Potential for tracking error

Key Takeaway

1. Direct exposure to Bitcoin through ETFs that hold the cryptocurrency in cold storage (e.g., Evolve Bitcoin ETF, CI Galaxy Bitcoin ETF, 3iQ CoinShares Bitcoin ETF)

2. Indirect exposure to Bitcoin through futures contracts (e.g., ProShares Bitcoin Strategy ETF, VanEck Bitcoin Strategy ETF, Valkyrie Bitcoin Strategy ETF)

3. Exposure to the broader cryptocurrency and blockchain ecosystem through ETFs that invest in related companies (e.g., Amplify Transformational Data Sharing ETF, First Trust SkyBridge Crypto Industry and Digital Economy ETF)

Frequently Asked Questions

1. What is a Bitcoin ETF?

A Bitcoin ETF is an exchange-traded fund that tracks the price of Bitcoin, allowing investors to gain exposure to the cryptocurrency without directly buying, storing, or managing it themselves. Bitcoin ETFs can invest directly in Bitcoin or indirectly through futures contracts or companies involved in the cryptocurrency industry.

2. What are the advantages of investing in a Bitcoin ETF?

Bitcoin ETFs offer several advantages, including:

1. Convenience: Investors can buy and sell shares of a Bitcoin ETF through their brokerage account, just like they would with stocks or other ETFs.

2. Regulation: Bitcoin ETFs are subject to regulatory oversight, providing investors with an added layer of protection.

3. Diversification: Some Bitcoin ETFs invest in a variety of cryptocurrencies or companies involved in the blockchain industry, offering diversification benefits.

3. What are the risks of investing in a Bitcoin ETF?

Investing in a Bitcoin ETF carries several risks, such as:

1. Volatility: Bitcoin is known for its price volatility, which can result in significant fluctuations in the value of a Bitcoin ETF.

2. Tracking error: Bitcoin ETFs that invest in futures contracts or other indirect methods may experience tracking errors, leading to performance that deviates from the actual price of Bitcoin.

3. Regulatory uncertainty: The regulatory for cryptocurrencies and related investment products is still growing, which could impact the performance and availability of Bitcoin ETFs.

4. How do I choose the right Bitcoin ETF for my investment goals?

When selecting a Bitcoin ETF, consider factors such as:

1. Investment strategy: Determine whether you prefer an ETF that invests directly in Bitcoin, indirectly through futures contracts, or in companies involved in the cryptocurrency industry.

2. Fees: Compare the management fees and other expenses associated with different Bitcoin ETFs to minimize costs.

3. Liquidity: Look for ETFs with higher trading volumes and tighter bid-ask spreads to ensure better liquidity.

4. Regulation: Consider ETFs that are subject to regulatory oversight in reputable jurisdictions for added protection.

5. Can I invest in a Bitcoin ETF through my retirement account?

The availability of Bitcoin ETFs in retirement accounts, such as 401(k)s or IRAs, depends on the specific plan and the custodian’s offerings. Some retirement plans may allow investments in Bitcoin ETFs, while others may not. Check with your plan administrator or financial advisor to determine if investing in a Bitcoin ETF is an option for your retirement account.