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Is this cryptocurrency ETF a super easy purchase?
A leading Bitcoin ETF could be a smart addition to your portfolio. But it’s not the only option on the table, so take a look at the benefits of different funds.
For the first time in history, most American investors can buy and sell Bitcoin (Bitcoin -2.77%) assets in their securities brokerage accounts. The emergency of exchange-traded funds (ETFs) that contain nothing but Bitcoin open a myriad of new doors. Large-scale money managers can trade these spot Bitcoin ETFs. They might be an option in yours ANGER OR 401(k) retirement accounts. Many investors simply prefer a familiar ETF format over opening accounts in a separate cryptocurrency trading service.
It’s still early, less than five months after the launch of the first 11 Spot Bitcoin ETF. however, the iShares Bitcoin Trust (IBIT -1.84%) has emerged as an early leader with a dominant market value and torrential daily trading volume.
Is the iShares ETF an Easy Buy for Bitcoin Investors in 2024? Or should you consider other options before this market leader?
Why the iShares Bitcoin Fund stands out from the crowd
The iShares family of funds is a household name. Managed by Black rock financial services empire, investors find it easy to trust this brand. Take a look at the top 100 largest ETFs, sorted by amount of assets under management (AUM), and today you’ll find 39 iShares funds on that list. Runner-up Vanguard boasts 30 funds in the top 100, followed by Crickets and Weeds until it reaches Highway‘s SPDR fund family with 16 names.
The Bitcoin fund is no exception, finding itself in the bottom half of the top 100 list. That’s no mean feat in a market with over 3,500 ETFs to choose from. With $21.2 billion in assets under management, the fund recently surpassed the former king of Bitcoin funds Grayscale Bitcoin Confidence (GBTC -1.84%), falling to 20.1 billion dollars from the all-time high of 29.0 billion dollars.
The fund is also heavily traded. About 38 million shares of the iShares Bitcoin ETF change hands on an average day. This corresponds to approximately $1.5 billion in daily trading value at today’s prices. The Grayscale ETF stops at $713 million and Fidelity Wise Origin Bitcoin (FBTC -1.88%) comes in third place with $593 million in daily volume.
Therefore, the iShares ETF has a significant advantage over major contenders in terms of market size, liquidity and brand laurels.
Where other funds can challenge iShares
Liquidity and brand power may be enough for most investors, but other funds may fight from a different perspective.
For example, the annual iShares fund sponsor fee amounts to a modest but not exceptional 0.25%. The fund quickly surpassed its $5 billion asset value in February, so the reduction in launch day fees only applies to a small portion of the fund. Fidelity will waive its fee until August 1, when the rate will rise to the same standard 0.25%. THE ARK 21Shares Bitcoin ETF (ARKB -1.85%) provides for a lower commission of 0.21% (but with no more exceptions). THE Bitwise Bitcoin ETF (BITB -1.85%) offers the lowest annual rate of all, at 0.20%, and its introductory discounts will end on July 12.
So iShares isn’t a landslide winner if you’re looking for the lowest fees possible. The differences may be small enough to make you prefer the BlackRock family of funds and its more robust market footprint, but the likes of Ark Invest and Bitwise are better choices for fee-sensitive investors.
Final thoughts on the iShares fund and Bitcoin ETFs in general
Although the iShares Bitcoin Trust stands out for its strong market presence and trading volume, it is not the only option worth considering. Depending on your investment priorities, other funds like Ark 21Shares Bitcoin ETF and Bitwise Bitcoin ETF may be more attractive, especially if focus on low commissions.
And, of course, you are essentially buying Bitcoin when you invest in one of these funds. Fasten your seat belt because there will be bumps in the road and a lot of turbulence in the market. The oldest and largest cryptocurrency looks set to end revolutionary benefits in the long termincluding a wave halved in the next year or two, but nothing is guaranteed and the cryptocurrency market can change in the blink of an eye. Make sure you are prepared for this volatility before buying shares of the iShares Bitcoin ETF or any other cryptocurrency-based fund. Cryptocurrencies are not every investor’s cup of tea.
The introduction of Bitcoin spot ETFs has undeniably expanded the tools available to modern investors. So, is the iShares Bitcoin ETF a no-brainer purchase? It could be, but only if it aligns with your specific investment strategy and goals. Again, you should also take a serious look at other spot Bitcoin ETFs.
Anders Bylund has positions in Bitcoin, Bitwise Bitcoin ETF Trust and Grayscale Bitcoin Trust (BTC). The Motley Fool has positions and recommends Bitcoin. The Motley Fool has a disclosure policy.