Buy Bitcoin ETFs in 2024: A Complete Guide. The worldwide crypto community is celebrating after the United States Securities and Exchange Commission (SEC) approved the first-ever batch of spot Bitcoin BTC $39,983 exchange-traded funds (ETFs). Fidelity, BlackRock, ARK Invest, VanEck, and Invesco were among the eleven firms whose applications were approved by the agency. Large and small investors will be able to put their money into the cryptocurrency with the most significant market share without owning any of it when the watershed moment happens. Investors can acquire exposure to Bitcoin without actually buying Bitcoin on a cryptocurrency exchange like Binance or Coinbase by purchasing the Bitcoin ETF.
Holding Bitcoin ETFs vs. Bitcoin
Using the same system index funds use, investors can purchase an ETF that tracks the price of a related commodity or security. Investors can easily manage their holdings in BTC ETFs without the hassle of crypto wallet maintenance or cold storage arrangements. Many organizations, including retirement plans and registered investment advisers (RIAs), have access to Bitcoin through Bitcoin exchange-traded funds (ETFs). Bitcoin is now in the possession of entities and ordinary people who were previously unable to access it or had doubts about investing in digital assets.
The word “spot” is used in the spot. Instead of referring to a derivative contract, “Bitcoin ETF” means the actual possession of assets. All investors will own bitcoins. Another option for investors is to purchase Bitcoin futures ETFs. This would include committing to buy or sell BTC at a fixed price on a specified date, independent of the market price. During trading hours, investors can buy, purchase, and sell Bitcoin ETFs.
Approved Bitcoin ETFs
On January 10th, prominent fund managers had their spot Bitcoin ETFs approved by the SEC. Listed below are some of the exchange-traded funds (ETFs) that have been approved: GBTC, IBIT, Bitwise, FBTC, ARK, BTCO, EZBC, BTCW, DEFI, BRRR, and IZBC.
Many U.S. stock exchanges, such as the NYSE, CBOE, and Nasdaq, will offer the authorized spot Bitcoin ETFs. The Securities and Exchange Commission (SEC) approved Bitcoin futures exchange-traded funds (ETFs) in October 2021. These funds follow contracts to purchase or sell Bitcoin. The Proshares Bitcoin Strategy ETF (BITO), traded on the New York Stock Exchange, was the first exchange-traded fund (ETF) tied to Bitcoin to get approval from the SEC. The standard ETF benefit is that it disperses a diverse portfolio of assets. But since it is connected to only one cryptocurrency—a Bitcoin ETF is bound to follow BTC’s wildly unpredictable price fluctuations.
Methods to Purchase Bitcoin ETFs
Buy Bitcoin exchange-traded funds (ETFs) can be done in a few different ways:
Online brokerage Accounts
Most brokerages provide a search bar where customers can enter a fund’s name or ticker symbol to trade in that fund. Investors can buy spot ETFs through brokerages like Interactive Brokers, Charles Schwab, Fidelity, Robinhood, and many more once they become legal in the U.S.
Even though the regulatory landscape changes rapidly, crypto exchanges plan to launch ETFs. By 2024, Kraken hopes to have built its ETF trading platform. Coinbase and other crypto giants own eight ETFs the SEC allows.
Crypto equities ETFs were a topic of interest for U.S. financial advisors in the Bitwise 2024 benchmark poll. According to the findings, 19% of advisors can purchase cryptocurrency using client funds. Additionally, the survey underlined that nearly all advisors (98%) want to keep or grow their client accounts’ exposure to cryptocurrency in 2024.
By offering a simple, low-cost, and automated investing platform, robo-advisors such as Betterment and Wealthfront make it easy to buy Bitcoin ETFs. New and seasoned investors can benefit from their low minimum balance requirements for cryptocurrency-related exchange-traded funds (ETFs). In most cases, robo-advisors allow investors to choose their own goals and risk tolerance before the software manages their portfolio automatically. Among these tasks are selecting investments, rebalancing portfolios, and asset allocation.
The investing division of a conventional bank is usually where an individual opens a brokerage account to buy Bitcoin ETFs. Finding the best Bitcoin ETF is the next step for traders once they’ve activated and funded their accounts. After learning about the ETF, the individual can buy shares using the bank’s brokerage services like any other stock or ETF.
Nevertheless, the accessibility and availability of Bitcoin ETFs could vary according to the client’s location and the specific offerings from the bank. It may be some time before consumers of conventional banks get the choice to invest in Bitcoin ETFs because the cryptocurrency regulatory landscape is continually changing.
Directly from ETF Issuers
The ETF issuer portals allow investors to purchase the product directly. Buying an ETF, though, might necessitate a broker account. For example, on the Hashdex website, customers can pick one of the issuer’s partner dealers.
How to Buy Bitcoin ETFs
The following is the procedure to follow to purchase Bitcoin exchange-traded funds (ETFs) using brokerage services:
- Open a brokerage account: Get the BlackRock or Robinhood app or visit their websites to access their brokerage services; after you’ve finished the Know Your Customer checks, log in.
- Fund the account: Every trader needs a checking or savings account that they can link to their brokerage account to finance it. Some of their options include transferring money from another broker, depositing a check, or making a wire transfer.
- Research available Bitcoin ETFs: Pay close attention to the issuer and expense ratio of any Bitcoin exchange-traded fund (ETF) if you are an investor considering purchasing one. The issuer’s cost for managing the ETF, known as the expense ratio, might affect the investment’s total returns.
- Select preferred Bitcoin ETFs: Numerous exchange-traded funds (ETFs) are available, allowing investors to pick the one that best suits their needs and objectives. After considering all of the possibilities, they can choose the funds that are the best match.
- Place an order: Order ETFs with account funds here. To buy Bitcoin ETF shares, choose the ETF and enter its ticker symbol on the brokerage account’s trading or order-placing interface. Users can use market, limit, or stop orders based on their trading style. Once the details are verified, the investor can submit the purchase.
- Monitor your investments regularly: Reviewing investments regularly allows investors to adapt to changes in the market and guide their investments toward success.
The Way Ahead
Institutional and retail investors can participate in Bitcoin in a more regulated environment thanks to the SEC’s approval of eleven spot ETFs. To stay competitive, some ETFs have reduced the fees associated with product management. Bitcoin ETFs anticipate bringing in a significant amount of money for the Bitcoin ecosystem. Soon after, Bitcoin might become the mainstream of global finance if additional nations adopt it.
Even though Bitcoin ETFs are the only ones that regulators have approved, many hope other significant cryptocurrency ETFs will also be supported. This may or may not happen now, but the crypto community is hopeful since they see the recent approvals as a precursor to more widespread cryptocurrency ETFs.