Best Bitcoin ETF Fees: Lowest to Highest (July 2024) (2024)

Education

Inthis guide, weanalyze and present the top 11 Bitcoin ETFs with the lowest fees for cost-effective investing asofJuly 26th, 2024.

Spot Bitcoin Exchange Traded Funds (ETFs) have arrived— sowhich (ifany) are right for you?

Before wedive in, here are the current spot Bitcoin ETF fees and BTC holdings…

Spot Bitcoin ETF Fees and Holdings (AsofJuly 22nd, 2024)

• Fee: 0.25% for the first 6 months or$5 billion

• BTC Holdings: 338,127 BTC with Coinbase

• 0.12% fees for first 6 months or$5 billion

• More Information

Grayscale Bitcoin Trust (GBTC)

• Fee: 1.5%

• BTC Holdings: 270,770 BTC with Coinbase

• Held 619K Bitcoin onlaunch

• More Information

Grayscale Bitcoin Mini Trust

• Fee: 0.15%

• GBTC: 10% ofGrayscale Bitcoin Trust (GBTC)— assets invested inthe Bitcoin Mini Trust (BTC)

• More Information

Fidelity Wise Origin Bitcoin Trust (FBTC)

• Fee: 0.25% (0% fee waived until Aug. 1, 2024)

• BTC Holdings: 181,087 BTC inself-custody

• More Information

• Fee: 0.21% (0% fees for the first 6 months or$1 billion)

• BTC Holdings: 49,225 BTC with Coinbase

• More Information

Bitwise Bitcoin ETF (BITB)

• Fee: 0.20% (0% fees for the first 6 months or$1 billion)

• BTC Holdings: 38,643 BTC with Coinbase

• More Information

VanEck Bitcoin Trust (HODL)

• Fee: 0.20% (Fee waived until Mar. 31, 2025 orfirst $1.5 billion infund assets, whichever comes first)

• BTC Holdings: 11,026 BTC with Gemini

• More Information

• Fee Update

Valkyrie Bitcoin Fund (BRRR)

• Fee: 0.49% (0% fees for the first 3 months)

• BTC Holdings: 8,487 BTC with Coinbase

• More Information

Invesco Galaxy Bitcoin ETF (BTCO)

• Fee: 0.25% (0% fees for the first 6 months or$5 billion)

• BTC Holdings: 7,908 BTC with Coinbase

• More Information

Franklin Bitcoin ETF (EZBC)

• Fee: 0.19% (Fee waived until Aug. 2, 2024 orfirst $10 billion infund assets, whichever comes first.)

• BTC Holdings: 6,818 BTC with Coinbase

• More Information

WisdomTree Bitcoin Trust (BTCW)

• Fee: 0.30% (0% for first six months oftrading orfirst $1 billion infund assets, whichever comes first)

• BTC Holdings: 1,347 BTC with Coinbase

• More Information

Hashdex Bitcoin ETF (DEFI)

• Fee: 0.90% (converted from futures ETF tospot ETF on03/27/24)

• BTC Holdings: 178 BTC with BitGo

• More Information

Bitcoin ETF fee information isupdateddaily. For the latest updates, click here.

Q1 Spot Bitcoin ETF Key Takeaways

• The initial three months oftrading for spot Bitcoin ETFs have ended, with the eleven offerings approved bythe SEC collectively attracting about $12.1 billion ininflows.

• Blackrock’s IBIT has emerged asthe leading beneficiary, securing $13.9 billion inflows since itstarted trading inJanuary.

• IBIT isthe fastest growing ETF inthe history ofETFs.

• OnMarch 27th, BlackRock CEO Larry Fink appeared onFox Business todiscuss the wild success ofits spot Bitcoin ETF product, IBIT. Fink’s spot Bitcoin ETF comments begin atthe 10 minute, 15 secondmark.

• More than 30 Bitcoin ETFs collectively owned 1,002,343 BTC asofMay24.

• BlackRock (IBIT) became the fastest ETF toreach $20B— added Bitcoin toits Strategic Income and Strategic Global BondFunds.

• BlackRock’s iShares Bitcoin Trust has become the world’s largest Bitcoin fund, amassing nearly $20 billion inassets since its U.S. listing inJanuary.

Bitcoin ETF Disclosure’s

• Millennium Management

  • Total investment: $1.9 billion

  • $844.2 million inBlackRock’s iShares Bitcoin Trust (IBIT)

  • $806.7 million inFidelity’s Wise Origin Bitcoin Fund (FBTC)

  • $202 million inGrayscale Bitcoin Trust (GBTC)

  • $45.0 million inARK 21Shares Bitcoin ETF (ARKB)

  • $44.7 million inBitwise Bitcoin ETF (BITB)

• Schonfeld Strategic Advisors

  • Manages $13 billion inassets

  • $248 million inBlackRock’s ETF

  • $231.8 million inFidelity’s fund

  • Total investment: $479 million

• Susquehanna International Group

  • Total investment: +$1.8 billion

• Morgan Stanley

  • $269.9 million inGBTC

• Aristeia Capital

  • $163.4 million inIBIT

• Wisconsin Investment Board

  • $162 million inIBIT, GBTC

• Other major investors

  • JPMorgan

  • Wells Fargo

  • UBS

  • BNP Paribas

  • Royal Bank ofCanada

Net Bitcoin ETF Inflows

Total Volume: $1.67B

Total Marketcap: $61.25B

Total AUM: $52.14B

Last Update:July 26, 2024— 1:56 PMUTC

Important Fee Considerations

Discounted Fees

• Some ETFs may offer discounted fees for alimited period, soinvestors should know theterms.

Trustworthy Companies

• Toensure security and reliability, choose anETF backed byatrusted company with substantial assets under management (AUM).

Want toknown more about spot Bitcoin ETF fees? Check out our complete overview.

Top 5 Bitcoin strategy ETFs byfee

Below isalist ofBitcoin strategy ETFs and their fees, inorder from lowest tohighest fee:

Global XBlockchain & Bitcoin Strategy ETF (BITS)

• Fee: 0.65%

• Mostly invested inBitcoinfutures. Also invested inthe Global XBlockchain ETF (BKCH)

• More information

Valkyrie Bitcoin Miners ETF (WGMI)

• Fee: 0.75%

• Invested inBitcoin mining stocks

• More information

Bitwise Bitcoin Strategy Optimum Roll ETF (BITC)

• Fee: 0.92%

• Invested inBitcoinfutures. Fee reduced to0.85% until Feb. 6, 2025

• More information

• Fee: 0.95%

• Invested inBitcoin futures

• More information

Types offees

There are four primary types offees associated with these Bitcoin ETFs:

1. Expense ratio fee

2. Total annual fund operating expenses fee

3. Bid-ask spread fee

4. Custodian fee

Let’s examine what each ofthesemeans…

Expense ratio fee

This ratio measures the fund’s operational cost, expressed asapercentage ofthe fund’sassets. Itdirectly affects the returns you might expect from the investment, ashigher expenses mean lower net returns.

Let’s take alook atafewexamples…

1. ProShares Bitcoin Strategy ETF (BITO) expense ratio: 0.95%.

2. ProShares Short Bitcoin ETF (BITI) expense ratio: 0.97%.

Total annual fund operating expenses fee

These are all the fund’s annual expenses, including management, administration, and compliancefees. These expenses are expressed asapercentage ofthe fund’s assets and can significantly impact the returns onyourinvestment.

The Simplify Bitcoin Strategy PLUS Income ETF has total annual fund operating expenses of11.18% with other costs, primarily composed ofinterest expense, estimated at10.33% for the fund’s initial fiscal year​​.

Another example isthe Bitwise Bitcoin Strategy Optimum Roll ETF (BITC), which has agross expense ratio of0.92%.

Bid-Ask Spread Fee

This isthe price difference between buyers' willingness topay and sellers' acceptance. It’s anindirect cost for investors.

The bid-ask spread for aBitcoin ETF represents the difference between the highest price abuyer iswilling topay (bid) and the lowest price aseller iswilling toaccept (ask). This spread iscrucial for investors, asitcan affect the overall cost oftrading the Bitcoin ETF.

The size ofthe bid-ask spread inBitcoin ETFs can vary based onseveral factors, including:

• The liquidity ofthe BitcoinETF.

• The underlying assets itholds.

Highly liquid Bitcoin ETFs usually have tight bid-ask spreads, often just afew pennies apart.Bitcoin ETFs traded less frequently orwith less liquid underlying assets can exhibit wider bid-askspreads.

Example: The SPDR S&P 500 ETF Trust (SPY) isknown for its tight bid-ask spread, often around 0.0032%. This ismainly due toits high liquidity.

The average bid/ask spread for the more than 2,900 ETPs (Exchange-Traded Products) listed onU.S. exchanges isabout 0.52%. However, the median spread ismuch lower (i.e., around 0.20%).

Custodian fee

Custodian fees ensure your Bitcoin remains safe (reason: Bitcoin needs secure storage toprevent theft orloss). These fees can vary depending onthe provider and the assets being stored.

FAQs onspot Bitcoin ETFs

What exactlyisaspot BitcoinETF?

The first thing tounderstand isexactly what anExchange-Traded Fund (ETF) means.

Investopedia

Anexchange-traded fund (ETF) isatype ofpooled investment security that operates much like amutualfund. Typically, ETFs track orseek tooutperform aparticular index, sector, commodity, orother asset.

ETFs differ from mutual funds inthat orders are executed throughout atrading day, whereas mutual fund orders can only beexecuted after market hours.

This means that you can place abuy orsell order with your broker during trading hours, and itwill executeit. Amutual fund order placed during the day will beexecuted after the marketcloses.

Now, let’s dive into spot BitcoinETFs. These exchange-traded funds directly track the price ofBitcoin, primarily byholding alarge amount ofthe cryptocurrency itself.

You can think ofthem assimilar toaspot gold ETF, which holds physical gold bullion onbehalf ofits shareholders.

Why dospot Bitcoin ETFsmatter?

Spot Bitcoin ETFs have finally arrived, and that’s big news forBitcoin. Inthe past, Bitcoin has often been (mistakenly) lumped inwith “crypto” assomething mysterious andrisky. Bitcoin ETFs change this narrative sinceBitcoin isnow being sold byWall Street toMain Street.

Basically, Bitcoin isnow legitimate inthe eyes oftraditional finance.Asaresult, these ETFs will become aninitial touchpoint for many futureBitcoiners. Ineffect, Wall Street will bethe advertising engine for anew generation ofBitcoin investors.

What’s the difference between spot and futures BitcoinETFs?

Spot Bitcoin ETFs directly hold Bitcoin, and their value reflects the current price ofBitcoin. Futures Bitcoin ETFs invest incontracts thatspeculateonthe future price ofBitcoin, giving purchasers price exposure without directownership. One issue with futures ETFs isthey can have price discrepancies due tothe dynamics ofthe futuresmarket.

Apollo provides anice overview that updates dailyonthe different kinds ofBitcoin ETFs:

Spot Bitcoin ETFs

Are simpler, mainly focusing onsecurely holdingBitcoin. They are more accessible and understandable for the averageinvestor.

Futures Bitcoin ETFs

Are more complex, involving futures contracts and associated rollcosts. They require adeeper understanding offutures markets and theirrisks.

When did spot Bitcoin ETFs become available?

OnJan. 10, 2024, the U.S. SEC approved 11 spot Bitcoin ETFs, the first spot Bitcoin ETFs ever, including ones from Fidelity, BlackRock andInvesco. These are the first cryptocurrency funds totrade onamajor exchange and hold Bitcoindirectly.

Btw ifyou’re not familiar with Bitcoin, CoinDeskexplains itthis way:

• “Bitcoin isthe world’s first successful decentralized cryptocurrency and payment system, launched in2009 byamysterious creator known only asSatoshi Nakamoto.”

The word “cryptocurrency” refers toagroup ofdigital assets where transactions are secured and verified using cryptography— ascientific practice ofencoding and decodingdata. Those transactions are often stored oncomputers distributed worldwide via adistributed ledger technology calledblockchain.

Learn more about Bitcoin atthe Swan Signal BitcoinBlog.

What are the pros and cons ofbuying Bitcoin ETFs vs. buying Bitcoindirectly?

With the arrival ofthese ETFs, it’s logical towonder aboutthe pros and cons ofpurchasing them asopposed tobuying Bitcoin directly. While spot Bitcoin ETFs are abig boost for the overall Bitcoin market, that doesn’t necessarily mean one isthe best pathfor you.

Pros ofbuying Bitcoin ETFs

They’re easy tobuy. You don’t have toworry about creating acryptocurrency exchange account, using ablockchain wallet, orfiguring out crypto taxes.

“Many investors can’t currently get exposure,”saidPeter Eberle, the Chief Investment Officer ofcrypto investment firm Castle Funds.

• “For example, many people with 401(k)s, IRAs, and similar accounts can’t easily accessBitcoin. These investors will beable toallocate funds goingforward. This will drive demand incoming years.”

Also, there’s more regulation provided since anETF isaudited, monitored, andtracked.

Cons ofbuying Bitcoin ETFs

With ETFs, you don’t actually own orhave direct access toBitcoin. AnETF means you own shares inafund that holdsBitcoin. When you hold your own Bitcoin, you can dowhatever you want with it.

Also, you’re payingfees. ETFs mean you wind uppaying Wall Street pros (via fund management fees/expenses) for something that you could doonyourown. Onthe other hand, you can buy Bitcoin directly (for example,via Swan) injust afew clicks.

It’s also worth noting that Bitcoin ETFs may not track the price ofBitcoinexactly. There could bedisparities between the performance ofBitcoin and anETF.

Also, there may becustodianship issues since most spot Bitcoin ETFs rely onathird-party custodian tostore their Bitcoin (usuallyCoinbase). IfCoinbase were to, say, run into financial woes orget penalized bythe government for some reason, itcould potentially put Bitcoin ETFs atrisk?

Will these fees remain thesame?

When itcomes tofees, this newly minted spot Bitcoin ETFs are navigating the equilibrium between supply anddemand. Currently, almost all ofthe Bitcoin ETF funds sport fees ranging from 0% to0.25% (Grayscale’s isanoutlier at1.5%).

That said, there may beongoing volatility with these fees since Bitcoin ETFs are brand-newproducts. Infact, we’ve already seen abattle tolower fees among them— Ark-21Shares, Valkyrie, Invesco-Galaxy, and others showed higher fees initially but lowered them later.

Bitwise, which opened with some ofthe lowest fees, dropped even lower, going from 0.24% to0.20%.

OnFebruary 14, news from ETF.com revealed that Fidelity had cut the total expense ratio (TER) for one ofits products from 0.75% to0.35%. This reduction, however, pertains toFidelity’s European offering, the Fidelity Physical Bitcoin ETP, and not toits US-listed Fidelity Wise Origin Bitcoin Fund (FBTC).

VanEck announced plans tolower the fees for its spot Bitcoin ETF, asdetailed inadocument submitted tothe U.S. SEC onFebruary 15.

VanEck also announced itwould temporarily eliminate the management fee for its spot Bitcoin ETF, HODL, due toits lower assets than competitors. This fee waiver will last until March 31, 2025, oruntil the fund’s assets reach $1.5 billion, whichever comes first.

Why isGrayscale charging more at1.50%?

CEO Michael SonnensheinsaidGrayscale’s experience indealing with crypto justifies the higher price point ofits ETF:

• “We’re acryptospecialist. We’ve weathered all different types ofspeed bumps and advancements within the cryptoecosystem. For alot ofthese asset managers and issuers, this isthe first time they’re going tobedealing with the complexities that gointo running these types ofproducts.”

So, what should you expect goingforward? That was the subject ofarecent Swan Signal monthly newsletter.

These ETF issuers are viciously competing with one another for capital because, inthe ETF world, liquidity isking. Typically, the largest ETF inanasset class dominates once itgains asignificant market share and gathersmomentum.

From there, they have the pricing power toset their fees asthey seefit. Once anETF wins, it’s very difficult for another totake its crown.

Sowhich Bitcoin ETF should Iget?

Itdepends.

Bryan Armour, editor ofMorningstar,arguesthat Buy-and-Hold investors should focus onfees while active ETF traders should prioritizeliquidity. Hewrites:

• “Investors can pick the best option for themselves byfocusing onthree fund criteria: fees, liquidity, and fund tradingcosts. Buy-and-hold investors should emphasize fees, those actively trading ETFs should focus onliquidity, and everyone should keep aneye onhow trading costs affect performance.”

Also, keep inmind buying Bitcoin directly may still bethe bestanswer. Buying real Bitcoin— which you can hold for the long term free ofannual fees and dowith asyou please, whenever you want— keeps you incharge.

Learn more about the benefits ofholding real Bitcoin inself-custody withSwan.

Which ofthese Bitcoin ETFs willsurvive?

It’s tough tosay. Itall depends onthe success ofthe firms promoting these ETFs and the demand for theproduct. Advertising has just begun, and the conservative nature oftraditional finance means many advisors and investors will want tosee atrack record for ETFs before increasing allocations.

Infact, Grayscale Investments CEO Michael Sonnensheintold CNBCthat most ofthe approved Bitcoin ETFs won’t survive saying,

• “Two tothree ofthe spot Bitcoin ETFs will maybe obtain some kind ofcritical mass” ofassets under management, but the others may bepulled from themarket. Idon’t ultimately think that the marketplace will have these 10 spot products wefind ourselves having.”

Spot Bitcoin ETFs smashed records ontheir first day trading seeing over 4.6 billion intrading volume, the highest ever for anETF launch.

Swan Bitcoin Daily Series

Tostay ontop ofall the daily inflow and outflow changes, check out our newDaily Bitcoin Show, hosted byDante Cook.

You can watch his most recent episodebelow. Find the entire playlist from the series here.

Which Bitcoin ETF has the cheapestfees?

Franklin Templetonreduced the feeofits Bitcoin ETF tobecome the cheapest among the new investmentproducts. Until Aug. 2, 2024, the fund manager will also waive off fees for its ETF till the fund reaches AUM of$10billion.

What are the best reasons tobuy BitcoinETFs?

Bitcoin ETFs offer amore regulated and mainstream way toaccess Bitcoin ifthat’s important toyou.

Forbes

Unlike the direct ownership ofBitcoin, which involves technical challenges such asmanaging wallets and cryptographic keys, investing inETFs offers amore conventional and straightforward way togain exposure toBitcoin’s market movements.

What will happen toBitcoin now that these ETFs have beenapproved?

Itmeans Bitcoin islevelingup. AsSwan Bitcoin CEO Cory Klippsten told Yahoo Finance:

• “The top-of-funnel for investor class isgoing tochange from something that iscontrary toBitcoin, which isall ofthe crypto scams and pump-and-dumps ofthe last six years, FTX and thelike… Now you’re going tosee anew era where some ofthe most credible, some ofthe most well-funded, trust brands inthe world are going tobeshouting from the rooftops with tens, maybe hundreds ofmillions ofdollars ofmarketing expense, just talking about Bitcoin.”

Final Words

Bitcoin was designed aspeer-to-peer money without the need for intermediaries. When opting into aBitcoin ETF, investors can leverage price action, but atthe cost ofself-sovereignty and long-term returns.

Weurge you toresearch tofully understand the trade-offs between owning Bitcoin and currently purchasing aBitcoin ETF.

Ifyou don’t think aBitcoin ETF orprivate key cold storage wallet option suits you, perhaps aBitcoin IRA and the tax advantages itpresentsdo. Ifyou need assistance orwould like todiscuss your individual retirement portfolio with one ofour IRA specialists book acall here.

IfaBitcoin IRA isn’t for you but you are still looking for analternative toCoinbase, find out how tobreak free ofCoinbase injust three easy steps.

Join Swan Bitcoin today!

For more information, please visitswan.com.