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Bitcoin, the world's most famous cryptocurrency, has finally made its way into the world of exchange-traded funds (ETFs). While Bitcoin ETFs tied to futures on the cryptocurrency have been around since 2021, it wasn't until January 2024 that U.S. officials permitted exchange-traded instruments that were directly linked to the daily volatility of bitcoin values, known as spot prices.
To assist investors in navigating this new area of the ETF universe, Forbes Advisor has examined the pure-play bitcoin ETFs that are presently available for trading in the US. These ETFs provide exposure to Bitcoin in different ways, offering investors various options to consider based on their investment goals and risk tolerance.
A Bitcoin ETF (Exchange-Traded Fund) is a financial product that allows investors to obtain access to Bitcoin's price changes without actually holding the cryptocurrency. It works by holding Bitcoin as the underlying asset and issuing shares to investors, which are traded on stock exchanges. This allows investors to buy and sell Bitcoin indirectly through their brokerage accounts, providing a more accessible and regulated way to invest in Bitcoin compared to buying and storing the cryptocurrency directly. Bitcoin ETFs are subject to regulatory approval and can offer investors a convenient way to diversify their portfolios with cryptocurrency exposure.
Invesco Galaxy Bitcoin ETF (BTCO) is a newer entrant to the Bitcoin ETF space but has quickly gained popularity among investors. With US$300 million in AUM, BTCO offers investors exposure to bitcoin through a transparent and regulated Bitcoin investment vehicle.
The iShares Bitcoin Trust ETF (IBIT) is another popular option for investors looking to gain exposure to Bitcoin. With US$2.7 billion in AUM, IBIT offers investors a way to invest in Bitcoin through a traditional ETF structure, providing a level of familiarity and ease of access for investors.
With an impressive US$20.7 billion in assets under management (AUM), Grayscale Bitcoin Trust (GBTC) is one of the largest and most well-known Bitcoin investment vehicles. GBTC offers investors exposure to Bitcoin through a traditional investment vehicle, making it an attractive option for those looking to invest in Bitcoin without directly holding the cryptocurrency.
ProShares Bitcoin Strategy ETF (BITO) is one of the largest bitcoin ETFs, with US$1.8 billion in AUM. BITO aims to provide investors with exposure to Bitcoin through a combination of Bitcoin futures contracts and other Bitcoin-related investments, offering a diversified approach to investing in Bitcoin.
Bitwise Bitcoin ETF (BITB) is another pure-play Bitcoin ETF that has gained traction among investors. With US$623 million in AUM, BITB offers investors exposure to Bitcoin through a traditional ETF structure, making it an attractive option for investors looking for a familiar investment vehicle.
ProShares Short Bitcoin ETF (BITI) is designed for investors who are bearish on Bitcoin and want to profit from a decline in its price. With US$77 million in AUM, BITI aims to provide investors with the inverse daily return of bitcoin, making it a potential hedge against a decline in the price of bitcoin.
For investors looking for leveraged exposure to Bitcoin, Volatility Shares 2x Bitcoin ETF (BITX) may be an attractive option. With US$222 million in AUM, BITX aims to provide investors with twice the daily return of Bitcoin, making it a potentially high-risk, high-reward investment.
As bitcoin continues to gain mainstream acceptance, the availability of bitcoin ETFs provides investors with more options to gain exposure to this popular digital asset. Whether investors are looking for pure-play bitcoin ETFs or more diversified options, there are the best bitcoin ETFs available that cater to a variety of investment strategies and risk tolerances.
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Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.
