Ask an advisor: Is a spot bitcoin ETF a good investment? (2024)

FAQs

Is it worth investing in bitcoin ETFs? ›

If long-term price performance is your only investment goal, then the new Bitcoin ETFs make a lot of sense. However, you could prefer direct-asset ownership of Bitcoin if you are concerned about the regulatory or legal aspects of crypto.

These shares are priced to reflect the current spot price of bitcoin and can be traded on traditional stock exchanges. Spot bitcoin ETFs make it easier for retail investors and traders to buy and sell an asset tied to the current value of bitcoin without needing to hold bitcoin itself.

The primary risk of spot Bitcoin ETFs lies in Bitcoin's inherent volatility, which can lead to significant fluctuations in the ETF value. Investors must be prepared for rapid price changes and potential losses. Additionally, ETF management involves fees, such as expense ratios, which can impact overall returns.

Another form of diversification is investing in assets with low correlation. Assets with low correlation tend to move in different directions, so for instance when stocks are up, Bitcoin or a Bitcoin-linked ETF tend to be down. This further diversifies your portfolio, and can help you weather market bumps over time.

ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses.

BlackRock's $20 Billion IBIT Fund Is World's Biggest Bitcoin (BTC) ETF - Bloomberg.

Based upon bitcoin's price history, and with tens of billions of dollars expected to flow into spot bitcoin ETFs in 2024, BTC could surpass its $65,000 high, with crypto services firm Matrixport predicting $120,000 by year's end.

Bitcoin ETF's price today is US$0.000329, with a 24-hour trading volume of $N/A. ETF is +0.00% in the last 24 hours. It is currently -5.05% from its 7-day all-time high of $0.0003465, and 0.31% from its 7-day all-time low of $0.000328. ETF has a max supply of 1 B ETF.

Does Vanguard have a Bitcoin ETF? ›

The recent introduction of spot bitcoin ETFs has been generating headlines and buzz in pockets of the industry. However, Vanguard does not have plans to create a Vanguard bitcoin ETF or other crypto-related products. Additionally, such products from other issuers will not be offered on our brokerage platform.

The Fidelity Wise Origin Bitcoin BTC -1.06% Fund (FBTC) is a spot bitcoin ETF that tracks the price of bitcoin. Fidelity filed for its spot bitcoin ETF in June 2023, shortly after BlackRock filed for one. The U.S. Securities and Exchange Commission approved its ETF, along with 10 others, on January 11, 2024.

Investing in crypto ETFs is not without risk. The market is volatile, with prices fluctuating significantly in short periods.

In the USA, the SEC's approach to Bitcoin ETFs initially involved compromises, favouring futures ETFs due to their perceived lower volatility and lower risk of price manipulation. However, a court ruling in August 2023 compelled the SEC to authorise spot ETFs, leading to a significant market rally.

These shares are available on traditional stock exchanges. The share price generally reflects the currency's prevailing market price. Shares track the price of Bitcoin as closely as possible and the ETF occasionally rebalances its holdings by buying or selling tokens.

THE CASE FOR IBIT

IBIT enables investors to access bitcoin through the convenience of an exchange-traded product, helping remove the operational, tax, and custody complexities of holding bitcoin directly.

Cryptocurrency exchange-traded funds (ETFs) track the price performance of cryptocurrencies by investing in a portfolio linked to their instruments. Like other such funds, crypto ETFs trade on regular stock exchanges, and investors can hold them in their standard brokerage accounts.

SIPC typically protects consumers from brokerages going bankrupt. It doesn't, however, protect them from investing in companies (or funds, like ETFs) that subsequently collapse due to market forces. SIPC simply insures the shares of bitcoin ETFs.

ETFs can be safe investments if used correctly, offering diversification and flexibility. Indexed ETFs, tracking specific indexes like the S&P 500, are generally safe and tend to gain value over time. Leveraged ETFs can be used to amplify returns, but they can be riskier due to increased volatility.