If you’re considering investing in Bitcoin (Cryptocurrency: BTC), there are quite a few ways to gain exposure to this leading cryptocurrency. You can buy Bitcoin directly from an exchange, or you might opt for Bitcoin proxy stocks like strategy (NASDAQ:MSTR).
However, one of the simplest methods is to invest in a new Spot Bitcoin ETF. The first of these ETFs was introduced in January 2024 and achieved significant success, managing to raise over $100 billion from investors in just one year.
Which Bitcoin ETF?
The challenging part is really deciding which Spot Bitcoin ETF to choose, as there are currently over ten available.
These ETFs track Bitcoin’s price directly. So, when Bitcoin’s value goes up, the ETF’s value does too. Conversely, a drop in Bitcoin’s price will also affect the ETF negatively.
Among these ETFs, the iShares Bitcoin Trust (NASDAQ:IBIT) stands out as the most popular, boasting over $61 billion in assets. This ETF is often highlighted when monitoring changes in investor sentiment regarding Bitcoin.
In a distant second, we have the Fidelity Wise Origin Bitcoin Fund (NYSEMKT:FBTC) with around $14 billion under management, while the grayscale bitcoin trust (NYSEMKT:GBTC) holds about $12 billion.
Factors to Keep in Mind
What makes these ETFs attractive is their accessibility through traditional brokerage accounts. Essentially, buying a Bitcoin ETF is as straightforward as purchasing any other ETF, without the need for cryptocurrency expertise or worrying about connectivity issues.
Nonetheless, it’s crucial to verify if your brokerage allows you access to these ETFs. Some major brokerages have limited or blocked access to Spot Bitcoin ETFs, citing concerns about cryptocurrency risks.
Another factor to keep in mind is the annual management fee. Generally, it’s wise to opt for a Bitcoin ETF that charges the lowest fees.
The good news is that most crypto ETFs have relatively low management fees, making them appealing to retail investors. For instance, iShares Bitcoin Trust has a typical expense fee of 0.25% annually, while the newly launched Morgan Stanley Bitcoin Trust (NYSEMKT: MSBT) offers even lower rates at just 0.14%.
Essentially, any new Spot Bitcoin ETF will serve a similar purpose, holding cryptocurrency on behalf of investors and reflecting the price closely, ideally at a near 1:1 ratio. If Bitcoin’s value rises significantly, as many anticipate, investors can fully partake in that increase.
Should You Buy Bitcoin Stock Now?
Before diving into Bitcoin stocks, it’s worth pondering a few things:
According to an analysis by the Motley Fool’s Stock Advisor, there are currently ten stocks touted as solid investments, and Bitcoin isn’t among them. These stocks are seen as having strong potential for impressive returns in the next few years.
For context, if you invested $1,000 in Netflix when it was first recommended back in December 2004, you would have about $475,926 today. Similarly, an investment in Nvidia, suggested on April 15, 2005, would now be worth around $1,296,608.
The Motley Fool’s Stock Advisor boasts an impressive average return of 981%, significantly outperforming the S&P 500’s 205%. It’s perhaps worth considering joining a community of retail investors to keep up with this kind of information.
