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How to Invest in Bitcoin ETFs (2026 Guide)

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Last updated 05/21/2024 by

SuperMoney Team

Edited by

Benjamin Locke

Benjamin Locke

Fact checked by

Andrew Latham

Andrew Latham

Summary:
Spot Bitcoin ETFs, now offered by major online brokerages, present a new avenue for investors to gain exposure to Bitcoin with ease. These ETFs, which directly track the price of Bitcoin, simplify the investment process by eliminating the need for separate cryptocurrency exchanges or wallets. While offering convenience and simplified tax reporting, Bitcoin ETFs also pose considerations such as higher expense ratios
With the recent approval of Bitcoin ETFs, there’s been a significant buzz in the investment community. Investors and financial enthusiasts alike are keen to understand how these new financial products will impact the cryptocurrency landscape and their portfolios. This development marks a pivotal moment, offering a more accessible route for mainstream investors to gain exposure to Bitcoin’s potential.

Purchasing locations for Spot Bitcoin ETFs

Spot Bitcoin ETFs can be acquired through a wide range of online brokerage firms, many of which offer these ETFs without any commission fees. Notably, Fidelity has launched its own spot Bitcoin ETF, known as the Fidelity Wise Origin Bitcoin Fund (FBTC). A selection of top brokerage platforms confirmed to host these ETFs includes:

How to buy Spot Bitcoin ETFs

To invest in spot Bitcoin ETFs, initiating a brokerage account is a prerequisite. A comprehensive guide is available to assist in opening an account, which can typically be set up online within 15 minutes. Following account creation, funding it via bank transfer is the next step.
To proceed with purchasing Bitcoin ETFs, adhere to the following procedure:

Identify the desired Bitcoin ETF

Utilize the brokerage’s search functionality or ETF screener to locate the specific ETF by name or ticker symbol. If you’re uncertain about which Bitcoin ETF to choose, especially if multiple options are available, it’s crucial to compare them. Pay particular attention to the fund’s expense ratio, the annual fee associated with ETF ownership. With expense ratios for spot Bitcoin ETFs ranging from 0.20% to 1.50%, the cost of a $100 investment would be between 20 cents to $1.50 annually. This fee becomes more significant with larger investments, so it’s important to be aware of the costs involved.

Execute the trade

After depositing funds into your account and selecting the desired Bitcoin ETF, executing your trade usually involves a simple click of the buy button. This step allows you to review your order, confirming the correct number of shares and the accurate ticker symbol before finalizing the purchase. Successfully placing your order signifies ownership of the ETF.

Pros and Cons of Bitcoin ETFs

WEIGH THE RISKS AND BENEFITS
Consider these advantages and disadvantages of Bitcoin ETFs.
Pros
  • Convenient purchasing through retail brokerages, eliminating the need for crypto-specific accounts or wallets.
  • Simplified tax reporting, as transactions integrate with traditional brokerage activities, easing tax preparation.
Cons
  • Potentially high ongoing fees, known as expense ratios, may reduce investment returns over time.
  • Limited control over the asset, contrasting with the direct ownership experience of cryptocurrencies.

Exploring alternative Bitcoin investment options

As the cryptocurrency landscape continues to evolve, it offers a variety of investment opportunities for those looking to diversify their portfolios with a touch of modern flair. Here are a couple of strategies for incorporating Bitcoin into your investment mix:

Direct Bitcoin purchases

Buying Bitcoin directly has become increasingly mainstream, with options to use it for everyday transactions, such as shopping on Amazon. However, caution is advised when integrating new assets into your investment strategy.

Investments tied to cryptocurrency

For those hesitant to dive fully into cryptocurrency, there are alternative ways to gain exposure to the digital currency space. For instance, Coinbase, a leading cryptocurrency exchange, became publicly traded in April 2021, allowing investors to purchase its stock. Additionally, there are various cryptocurrency stocks available that provide a way to invest in the technology behind cryptocurrencies without directly purchasing the digital currencies themselves.

Key takeaways

  • Spot Bitcoin ETFs are accessible through major online brokerages like Charles Schwab and Fidelity, offering investors a straightforward path to Bitcoin investment without direct cryptocurrency engagement.
  • Investing in Bitcoin ETFs involves selecting the right fund based on expense ratios and other key factors, with costs varying significantly across different ETFs.
  • Bitcoin ETFs simplify the investment process and tax reporting but come with potential downsides such as higher ongoing fees and less control over the investment compared to direct cryptocurrency ownership.
  • Alternative investment options in the cryptocurrency space include direct Bitcoin purchases and investing in crypto-related stocks, such as Coinbase, providing diverse ways to engage with digital currencies.

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