Ever feel like you've arrived late to the Bitcoin (BTC 0.81%) party? Fear not, because the Securities and Exchange Commission (SEC) just sent out a fresh batch of invites in the form of 11 exchange-traded funds (ETFs) based on Bitcoin's real-time spot price.
It's like a buffet of Bitcoin investment options, and I've lined them all up for you right here. The handy table below is your personal menu, serving up the essential details: from the amount of digital dough they're managing on Day One as a Bitcoin ETF to the fees they'll charge for the pleasure of their company.
11 Bitcoin ETFs by the numbers
|
ETF Name |
Ticker |
Assets Under Management (AUM) in Dollars |
Number of Bitcoin Under Management |
Annual Fee (Expense Ratio) |
Fee Waiver Details |
|---|---|---|---|---|---|
|
Grayscale Bitcoin Trust |
(GBTC -1.16%) |
$28.6 billion |
619,187 |
1.5% |
N/A |
|
VanEck Bitcoin Trust |
(NYSEMKT: HODL) |
$75.2 million |
1,629 |
0.25% |
N/A |
|
Fidelity Wise Origin Bitcoin Trust |
(NYSEMKT: FBTC) |
$20 million |
433 |
0.25% |
Waived until August 1, 2024 |
|
iShares Bitcoin Trust |
(NYSEMKT: IBIT) |
$10.4 million |
228 |
0.25% |
0.12% for first 12 months or until $5 billion AUM |
|
ARK 21Shares Bitcoin ETF |
(NYSEMKT: ARKB) |
$10.3 million |
223 |
0.21% |
Waived for first 6 months or until $1 billion AUM |
|
Invesco Galaxy Bitcoin ETF |
(NYSEMKT: BTCO) |
$5.0 million |
108 |
0.39% |
Waived in first 6 months for the first $5 billion AUM |
|
Hashdex Bitcoin ETF |
(DEFI 1.30%) |
$5.0 million |
108 |
0.9% |
N/A |
|
Bitwise Bitcoin ETF |
(NYSEMKT: BITB) |
$2.5 million |
54 |
0.2% |
Waived in first 6 months for the first $1 billion AUM |
|
Franklin Bitcoin ETF |
(NYSEMKT: EZBC) |
$2.7 million |
58 |
0.29% |
N/A |
|
Wisdom Tree Bitcoin Fund |
(NYSEMKT: BTCW) |
$2.4 million |
52 |
0.3% |
Waived in first 6 months for the first $1 billion AUM |
|
Valkyrie Bitcoin Fund |
(NYSEMKT: BRRR) |
$523,000 |
11 |
0.25% |
Waived in first 3 months |
This data was collected from each ETF's official homepage on Jan. 11, 2024. Bitcoin was valued at $46,154 per token at the time of writing. The Grayscale Bitcoin Trust has actually moved from an over-the-counter listing to the New York Stock Exchange, but our publishing system treated it as an OTC ticker on Jan. 11.
Now, most of these figures will probably change very quickly. Most of these funds are entirely new investment vehicles created from whole cloth after the SEC's long-awaited approval. Others have been around for a while.
For instance, the Grayscale Bitcoin Trust was founded in 2013, managing its Bitcoin holdings under a mutual fund structure for more than a decade. In 2021, the Hashdex Bitcoin ETF, formerly known as the Hashdex Bitcoin Futures ETF, started basing its price on financial derivatives of the actual Bitcoin asset.
Either way, I expect a rapid inflow of investor funds into these new or reformed ETF assets. Assets under management (AUM) should increase quickly in some funds and slower in others as buyers pick their favorite options. That being said, the snapshot above should be useful as a guide to the expense ratios, introductory fee-waiver policies, and potential scale of each Bitcoin ETF.
What's my next move?
Having reviewed the new options, I'm sorely tempted to move my existing Grayscale Bitcoin Trust holdings into a different vehicle with lower fees. The 1.5% expense ratio suddenly feels cumbersome in a whole new way.
The Grayscale fund has recently traded significantly below the up-to-date value of its Bitcoin holdings, as investors worried about the lack of progress on its ETF conversion. That discount is gone now.
I got what I wanted, and my investment thesis for Grayscale's Bitcoin fund played out as expected. It's nice to see things working out as planned, but the ETF approval also ended the main reason I didn't mind a stiff management fee as I built my Grayscale position between November 2022 and July 2023. With the 20/20 vision of hindsight, I feel good about picking up Grayscale shares in that period:
GBTC Discount or Premium to NAV data by YCharts.
ETFs with expense ratios in the range of 0.2% to 0.3% should deliver roughly 1.3% stronger annual returns than the costly Grayscale fund for years to come. That works out to a 12.7% difference in 10 years or a 26.9% outperformance in two decades. It's not a game-changing upgrade, but I would hate to leave a double-digit long-term increase on the table.
I'm particularly tempted by household names like the iShares series (a brand of the BlackRock (BLK) financial services giant), the subject expertise and low fees at Bitwise, and the equally slim expenses in the offering from Cathie Wood's ARK firm.
Feel free to take your time, dear reader
I can't actually do anything for a few days after publishing these words, of course, so the Motley Fool's ironclad disclosure rules will give me some time to weigh these options and their benefits. And in a couple of days, the AUM texture of this table may have changed significantly. Investing is never boring, especially in the ever-changing cryptocurrency market.
You can jump in right away or follow my lead and give some thought to this influx of new assets before taking action. Only time will tell which course will deliver the best long-term returns, but looking both ways before you cross Wall Street is always a good idea in my book. Good luck, and be careful out there.
