8 Best Bitcoin ETFs of May 2024

Find out which spot Bitcoin ETFs have the lowest fees and highest returns in this detailed comparison of the best Bitcoin ETFs available this month.

After years of speculation and anticipation, the U.S. Securities and Exchange Commission (SEC) has finally approved spot Bitcoin exchange-traded funds (ETFs) in January 2024. This landmark decision is a game-changer for investors looking to gain exposure to Bitcoin without actually owning the cryptocurrency themselves.

With the approval of Bitcoin ETFs, investors now have the opportunity to add this digital asset to their portfolios through traditional brokerage accounts, just like they would with stocks or bonds. This eliminates the need to navigate the complexities of obtaining, storing and securing Bitcoin on their own, making it much more accessible to a wider range of investors.

However, with the floodgates now open for Bitcoin ETFs, the challenge lies in selecting the best option among the growing list of contenders. Benzinga has narrowed down the list to present the top spot Bitcoin ETFs this month. Dive deeper into this guide to discover which ETF best suits your investment goals and risk tolerance.

Top Spot Bitcoin ETFs by Fee

Below is a table comparing the fees of several prominent Bitcoin ETFs.

The 8 Best Spot Bitcoin ETFs to Buy

Let's explore some of the best spot Bitcoin ETFs available in the market.

Fidelity Wise Origin Bitcoin Fund (FBTC)

The Fidelity Wise Origin Bitcoin Fund (FBTC) provides exposure to the price of Bitcoin, offering an alternative to direct Bitcoin purchases. Managed by Fidelity Digital Asset Management, which has a track record in Bitcoin research since 2014, FBTC aims to cater to investors with a high risk tolerance.

It invests solely in Bitcoin, a highly volatile and potentially illiquid asset, making it suitable for those comfortable with such risks. FBTC operates with a competitive fee structure, charging 0.25% of assets under management, with a fee waiver in effect until Jul. 31, 2024. 

FBTC is not registered under the Investment Company Act of 1940 or regulated under the Commodity Exchange Act of 1936, which means shareholders may lack certain protections. As with any investment involving digital assets, investors should thoroughly assess FBTC's investment objectives, risks, charges and expenses before considering an investment.

ProShares Bitcoin Strategy ETF (BITO)

The ProShares Bitcoin Strategy ETF (BITO) is designed to mirror the performance of Bitcoin. As the first U.S. Bitcoin-linked ETF, BITO offers investors the convenience of trading Bitcoin through a brokerage account, eliminating the need for a separate cryptocurrency exchange account or wallet.

Rather than directly investing in Bitcoin, BITO achieves its objectives by managing exposure to Bitcoin futures contracts. This strategy allows investors to gain exposure to Bitcoin's price movements without holding the underlying asset. BITO is non-diversified and concentrates its investments, which may lead to higher volatility.

The fund incurs an expense ratio of 0.95%, and its performance is based on the midpoint of the bid/ask spread at 4:00 p.m. ET, adjusted for brokerage commissions. BITO's net asset value (NAV) and market price are updated daily, with a 30-day median bid/ask spread of 0.03%. 

Its top holding is the Ps Cayman Bitcoin Strategy Port ETF USD, comprising approximately 25.92% of the fund's assets. BITO was established on Oct. 18, 2021, marking its inception as a prominent player in the cryptocurrency ETF market.

Valkyrie Bitcoin Strategy ETF (BTF)

The Valkyrie Bitcoin and Ether Strategy ETF (NASDAQ: BTF) focuses primarily on Bitcoin and Ethereum futures contracts. Launched on Oct. 21, 2021, BTF aims to track the performance of Bitcoin and ether prices without requiring investors to directly own or hold the underlying cryptocurrencies. 

With a net expense ratio of 1.24%, BTF provides exposure to the crypto market through a traditional ETF. The fund's portfolio consists of Bitcoin futures contracts, comprising 58.41% of holdings, and U.S. Treasury bills, making up 28.79%. However, investors should be aware of the inherent risks associated with investing in futures contracts, derivatives and the specific investment strategy employed by the fund. 

Despite these risks, BTF offers investors a regulated and transparent way to participate in the potential growth of the Bitcoin and Ethereum markets, catering to those seeking exposure to cryptocurrencies within the framework of a traditional investment portfolio.

VanEck Bitcoin Trust (HODL)

The VanEck Bitcoin Trust (HODL) is designed to mirror the performance of the price of Bitcoin minus the operational expenses of the Trust. Launched on Jan. 4, 2024, the Trust holds Bitcoin and calculates its share values based on the prevailing market price of Bitcoin, as determined by the MVIS CryptoCompare Bitcoin Benchmark Rate. 

With net assets amounting to $626.07 million as of May 16, 2024, HODL offers investors exposure to the cryptocurrency market through a regulated offering. Traded on the CBOE under the ticker symbol HODL, the Trust carries an expense ratio of 0.20%. 

However, investors should exercise caution because of the inherent volatility of Bitcoin prices, influenced by factors such as market demand, investor sentiment and regulatory developments. 

ARK 21Shares Bitcoin ETF (ARKB)

The ARK 21Shares Bitcoin ETF (ARKB) is incorporated in the U.S., with the primary objective of mirroring the performance of spot Bitcoin. Headquartered in New York, this ETF seeks to provide investors with exposure to Bitcoin's price movements within a regulated and accessible investment structure. 

Launched on Jan. 4, 2024, ARKB is managed by 21Shares US LLC and boasts a net expense ratio of 0.21%. While the fund's performance over the past year has been 22.10%, which exceeds the category average, its 3-year return stands at -0.21%, below the category average. However, its 5-year return of 1.57% surpasses the category average. 

The fund's underlying holdings primarily consist of Bitcoin, with a geographic focus primarily on the United States. Emphasizing an alternative-asset-class focus, ARKB employs a vanilla weighting scheme, single-asset approach, open-volume and in-specie strategy. 

Bitwise Bitcoin ETF Trust (BITB)

The Bitwise Bitcoin ETF Trust (BITB) is managed by Bitwise Asset Management, a prominent crypto index fund manager in the United States. BITB aims to provide investors with accessible and professionally managed exposure to Bitcoin at a low cost. Launched on Jan. 10, 2024, and traded on the NYSE Arca exchange, the fund seeks to reflect the performance of Bitcoin, as measured by the CME CF Bitcoin Reference Rate-New York Variant, adjusted for expenses and liabilities.

With a net expense ratio of 0.20%, BITB presents an opportunity for investors to participate in the Bitcoin market while being aware of its associated risks, including significant volatility and potential for loss. The fund's custodian, the Bank of New York Mellon, ensures the security of its assets while its auditor, KPMG, and legal counsel, Chapman and Cutler, LLP, contribute to regulatory compliance and transparency.

The sponsor's agreement to waive the sponsor fee on the first $1 billion of trust assets for an initial six-month period underscores its commitment to investor value. BITB's holdings primarily consist of Bitcoin, with a geographic focus primarily on the United States.

Emphasizing an alternative asset class focus, BITB employs a vanilla weighting scheme, single-asset approach, open-volume and in-specie strategy, providing investors with a well-rounded and regulated investment vehicle for exposure to the dynamic world of Bitcoin.

iShares Bitcoin Trust ETF (IBIT)

The iShares Bitcoin Trust ETF (IBIT) is offered by BlackRock, a leading ETF firm renowned for its innovation and expertise. IBIT aims to provide investors with convenient access to Bitcoin within a traditional brokerage account, streamlining the investment process similar to stocks and bonds.

IBIT is structured to reflect the performance of the price of Bitcoin, less the expenses of the trust's operations. With a net expense ratio of 0.12%, investors should be aware of the associated risks, including potential volatility and the possibility of significant or complete loss of investment.

Trading under the ticker symbol IBIT on the NYSE Arca exchange, the fund's inception date was Jan.10, 2024. Its 52-week range spans from $22.02 to $41.99, with a price of $37.67 as of May 15, 2024. While the fund does not offer a dividend yield or beta, its 30-day average volume stands at 27.97 million shares.

Franklin Bitcoin ETF (EZBC)

The Franklin Bitcoin ETF (EZBC) is managed by Franklin Templeton Investments, a reputable and well-established investment firm.

What sets the Franklin Bitcoin ETF (EZBC) apart from other Bitcoin investment options is that it is backed by physical Bitcoin holdings. This means that the ETF holds actual Bitcoin as opposed to futures contracts or other derivatives. This provides investors with a more direct and secure way to access the potential benefits of investing in Bitcoin.

One of the key benefits of the Franklin Bitcoin ETF is its accessibility to a wide range of investors. Whether you are an individual looking to dip your toes into the world of cryptocurrency or a seasoned investor seeking to diversify your portfolio, this ETF provides a convenient and cost-effective way to gain exposure to Bitcoin.

Additionally, the Franklin Bitcoin ETF is designed to provide investors with transparency and liquidity, allowing for easy buying and selling of shares on the open market. This flexibility is essential for investors who want to capitalize on market trends and make informed decisions about their investments.

The Fund is not registered under the Investment Company Act of 1940 (1940 Act). As a result, it is not held to the same regulatory standards as mutual funds or ETFs that are registered under the 1940 Act.

What is a Spot Bitcoin ETF?

A Bitcoin ETF enables investors to track the price of Bitcoin without the need to directly purchase and hold the cryptocurrency itself. 

What sets Bitcoin ETFs apart is their exchange-traded nature. Unlike traditional methods of buying Bitcoin through cryptocurrency exchanges, Bitcoin ETFs are traded on well-established stock exchanges. This level of accessibility allows investors to seamlessly incorporate Bitcoin into their investment portfolios alongside stocks and other securities.

How Spot Bitcoin ETFs Work

When you buy shares of a Bitcoin ETF, the fund will purchase Bitcoin on your behalf and hold it in a custodial account. The value of the ETF is then based on the price of Bitcoin, allowing investors to benefit from the price movements of the cryptocurrency without the need to actually own and store it themselves.

Another key aspect of how Bitcoin ETFs work is that they are regulated investment products. This means that they have to adhere to strict rules and guidelines set by regulatory bodies, providing investors with a level of security and transparency that can sometimes be lacking in the cryptocurrency market.

Keep in mind that Bitcoin ETFs also come with associated fees that impact overall returns. Here's a breakdown of the types of fees and transaction costs associated with Bitcoin ETFs.

• Expense ratio: The expense ratio is the primary fee charged by Bitcoin ETFs, typically on an annual basis. It encompasses various operational expenses, including administration, security, legal fees and other overhead costs incurred by the fund manager. 
• Management fees: Part of the expense ratio goes towards management fees, compensating the fund managers for their expertise in overseeing the ETF's portfolio. 
• Custody fees: Bitcoin ETFs hold either actual Bitcoin or Bitcoin futures contracts as part of their portfolio. To safeguard these assets, the fund typically incurs custody fees paid to a qualified custodian with robust security measures. 
• Trading fees: When investors buy or sell shares of a Bitcoin ETF on the stock exchange, they may incur separate trading fees charged by their brokerage platform. These fees are independent of the expense ratio and can vary depending on the investor's broker. 

Pros and Cons of Spot Bitcoin ETFs

Let's explore the pros and cons of this new type of investment.

Where to Buy the Best Bitcoin ETFs

Ready to invest in spot Bitcoin ETFs? Open a brokerage account with trusted platforms such as Robinhood and WeBull.

Will Spot Bitcoin ETFs Affect the Price of Bitcoin?

It is possible that the introduction of Bitcoin ETFs could affect the price of Bitcoin. The increased accessibility and legitimacy that would come with ETFs may attract more investors, driving up demand and potentially increasing the price. However, it is also possible that the market is already factoring in the potential impact of ETFs, so the effect on price may be minimal. Investors should carefully monitor the market and consider all factors before making any investment decisions.

Enjoying the Bitcoin ETF Landscape

Bitcoin ETFs offer a simplified and regulated route for investors to gain exposure to Bitcoin's price movements. They provide accessibility, potential diversification and cost-effectiveness, while direct ownership offers control and direct participation in the cryptocurrency market. Among the top 8 spot Bitcoin ETFs, FBTC is Benzinga’s top pick as it is offering 0% fees and a 0.25% waiver. Choose wisely based on your preferences and investment objectives.

Frequently Asked Questions