Top Bitcoin ETFs By Total Assets Under Management In 2024
Cryptocurrency Exchange-Traded Funds (ETFs) have emerged as a popular investment option, allowing investors to track the price performance of one or more cryptocurrencies. Similar to traditional ETFs, these crypto ETFs are traded on regular stock exchanges, providing a convenient avenue for investors who prefer holding assets in their standard brokerage accounts.
One distinguishing feature of crypto ETFs is their ability to mirror the value of cryptocurrencies through various investment strategies. One approach involves investing in futures contracts for digital currency, while another method entails direct investment in digital currencies themselves.
Read more: Bitcoin Spot ETF Explained: All Things You Need To Know!
In a significant development for the cryptocurrency market, the Securities and Exchange Commission (SEC) has given the green light to the first crypto spot ETFs, marking a milestone after nearly a decade of regulatory discussions. This move opens up new opportunities for both retail and institutional investors, providing them with a regulated and convenient avenue to invest in Bitcoin.
A Bitcoin ETF, or exchange-traded fund, functions as a financial instrument enabling investors to track the price movements of Bitcoin without the need to possess the cryptocurrency itself. The key distinction lies in the fact that shares of a Bitcoin ETF are traded on traditional stock exchanges, offering a bridge for traditional investors to enter the dynamic cryptocurrency market. Read More
The appeal of Bitcoin ETFs is evident in the growing interest from investors at various levels. They present a more accessible and regulated alternative for those who may be reluctant to directly engage with cryptocurrencies due to concerns regarding security, regulatory compliance, or the intricacies of managing digital assets.
Investors now have the opportunity to directly participate in the cryptocurrency market without the need to own the assets themselves. This shift in the regulatory landscape is expected to attract a broader range of market participants, bringing cryptocurrency investment into the mainstream.
It’s worth noting that, as of now, both spot Bitcoin ETFs and futures Bitcoin ETFs have received regulatory approval in the United States. This opens up avenues for investors to engage with different aspects of the cryptocurrency market, catering to diverse investment preferences.
A Spot Bitcoin ETF is designed to provide investors with direct exposure to the current market price of Bitcoin. In financial terms, “spot” denotes the immediate or real-time price of the underlying asset, which, in this case, is Bitcoin itself. These ETFs typically hold actual Bitcoin as their underlying asset, aiming to closely track the real-time fluctuations in Bitcoin’s market value.
One notable example of a Spot Bitcoin ETF is the 21Shares Bitcoin Core ETP (CBTC). However, it’s essential to note that, as of now, these Spot Bitcoin ETFs operate exclusively outside of the United States.
Futures Bitcoin ETFs take a different approach. Rather than holding actual Bitcoin, they utilize Bitcoin futures contracts to gain exposure to the cryptocurrency. A Bitcoin futures contract enables investors to speculate on and predict the future price movements of the asset.
It’s crucial to understand that Futures Bitcoin ETFs can behave differently from their Spot counterparts. One key distinction lies in the fact that there is no direct ownership of Bitcoin; instead, investors engage in contracts tied to the anticipated future value of the cryptocurrency. Moreover, some Futures Bitcoin ETFs are specifically designed to provide leveraged or inverse exposure to Bitcoin’s price.
| Name | Ticker | AUM |
| Grayscale Bitcoin Trust | GBTC | $1.173 billion |
| IShares Bitcoin Trust | IBIT | $710 million |
| Fidelity Wise Origin Bitcoin Fund | FBTC | $524.3 million |
| Bitwise Bitcoin ETF | BITB | $305.1 million |
| Ark 21Shares Bitcoin ETF | ARKB | $227.4 million |
Grayscale is a subsidiary of the Digital Currency Group, which plays a pivotal role by offering investors opportunities to explore the crypto asset class. A significant development is the transformation of Grayscale’s flagship product, the Grayscale Bitcoin Trust (GBTC), from a traditional trust into an Exchange-Traded Fund (ETF).
Originally launched in 2013, GBTC has become the world’s largest publicly traded Bitcoin trust, boasting a substantial market capitalization of $28 billion. This shift towards converting GBTC into an ETF aligns with the evolving preferences of investors in the crypto space. GBTC ranks No. 1 in the top Bitcoin ETFs with assets under management at the current time of $1.173 billion.
The Grayscale Bitcoin Trust allows investors to seamlessly buy and sell stocks backed by Bitcoin, providing them with exposure to the volatile yet potentially lucrative cryptocurrency market. By transitioning to an ETF structure, Grayscale aims to enhance the accessibility of GBTC to a broader investor base, catering to the increasing demand for crypto-related investment products.
GBTC‘s expense ratio is currently set at 1.5%. While the trust has been a prominent player in the crypto space since its launch in 2013, its relatively high expense ratio raises questions about its competitiveness in a market where cost-conscious investors seek value.
In a surprising turn of events in June 2023, BlackRock, the world’s largest asset manager boasting over $9 trillion in assets as of Q1 2023, sent shockwaves through the traditional finance (TradFi) world by filing an application for a Bitcoin Exchange Traded Fund (ETF). IBIT ranks second in the top Bitcoin ETFs with $710 million in AUM.
The ETF, named IBIT, became the catalyst for a frenzy in the spot Bitcoin ETF market when news broke about BlackRock’s groundbreaking application during the summer. The move marked a significant shift in the financial landscape, as BlackRock’s entry into the cryptocurrency sector hinted at growing mainstream acceptance.
Adding to the dynamics of this development, BlackRock has aligned itself with Coinbase, utilizing the platform as its cryptocurrency custodian and spot market data provider. Simultaneously, BNY Mellon plays a crucial role as the cash custodian for IBIT, contributing to the fund’s operational infrastructure.
Furthermore, BlackRock has named several financial entities as authorized participants in the iShares Bitcoin Trust. Among them are JP Morgan Securities, Jane Street Capital, Macquarie Capital, and Virtu Americas.
With a standard fee of 0.25%, IBIT has positioned itself as one of the most prominent Bitcoin ETFs available to investors. However, recent developments indicate that BlackRock, the asset management giant overseeing IBIT, is implementing a fee reduction strategy.
The company has slashed fees to 0.12% for the initial $5 billion in assets under management or for a duration of 12 months, whichever milestone is reached first.
March 2021 witnessed a surge in Bitcoin ETF applications, with Fidelity’s Wise Origin Bitcoin Trust leading the way. Notably, Fidelity chose a distinctive approach by choosing to self-custody Bitcoin as the foundation for their ETF, eschewing popular alternatives such as Coinbase or Gemini.
The Fidelity Bitcoin Trust, abbreviated as FBTC, represents the asset management giant’s foray into the ETF space, leveraging its established reputation in traditional finance. Noteworthy is Fidelity’s decision to handle the custody of Bitcoin internally, a departure from the common practice of relying on external platforms like Coinbase or Gemini for such services.
Unlike other players entering the Bitcoin ETF arena, Fidelity already allows its customers to purchase Bitcoin and Ethereum directly through their brokerage accounts. FBTC is currently one of the top Bitcoin ETFs, with $524.3 million in AUM. Authorized participants include Jane Street, JP Morgan Securities, Macquaries and Virtu Americas.
Traded on the CBOE, Fidelity’s Bitcoin Trust not only boasts a moderate expense ratio but also comes with a noteworthy fee waiver. The standard fee of 0.25% is set to be waived until July 31, 2024, adding a significant allure for potential investors looking to capitalize on the growing interest in digital assets.
This fee waiver plays a crucial role in enhancing FBTC’s attractiveness in the market. Until the middle of next year, investors can benefit from a cost-effective entry into the world of Bitcoin ETFs, thanks to Fidelity’s strategic decision to waive fees temporarily.
Bitwise is the pioneer in launching a distinctive advertising campaign, undeterred by previous rejections from the SEC. The company’s journey in seeking approval for a Bitcoin spot ETF began in October 2019, encountering setbacks alongside numerous other applications similarly dismissed by the regulatory body. BITB is among the top Bitcoin ETFs with an AUM of $305.1 million.
Bitwise’s dedication to cryptocurrency-related investment products is evident beyond its quest for a Bitcoin spot ETF. The asset manager already boasts a diverse portfolio of crypto-related ETFs, including the Bitwise 10 Crypto Index Fund.
This fund strategically invests in an index including the top 10 cryptocurrencies by market capitalization, providing investors with exposure to a well-curated selection of digital assets. Coinbase is the cryptocurrency custodian, while BNY Mellon is both the administrator and custodian for the trust. Jane Street, Macquarie and Virtu Americas are authorized participants.
Mirroring the fee structure of ARKB, BITB offers investors a fee of 0.20%, a rate that stands as an attractive proposition in the current market. However, what sets BITB apart is the strategic move by its sponsor, Bitwise, to further enhance its appeal.
Bitwise has implemented a fee waiver incentive, a practice reminiscent of ARK Invest, wherein the fund sponsor will waive the 0.20% fee for the initial six months or until the fund accumulates its first $1 billion in investments, whichever milestone is reached first.
Ark Invest, the renowned investment firm led by Cathie Wood, officially filed for the Ark 21Shares ETF in June 2021. In a strategic collaboration, Ark Invest joined forces with the Swiss-based ETF provider, 21Shares AG, to introduce the Ark 21Shares Bitcoin ETF. This pioneering fund is actively traded on the Cboe’s BZX Exchange and can be identified by the distinctive ticker symbol ARKB.
Adding to the significance of this venture, Coinbase has been entrusted with the role of cryptocurrency custodian, ensuring the secure management of digital assets. Noteworthy financial entities such as Jane Street, Macquarie, and Virtu Americas have been appointed as authorized participants in the ETF. ARKB is one of the top Bitcoin ETFs on this list, with an AUM of $227.4 million.
ARKB distinguishes itself with a competitive expense ratio of 0.21%, positioning it favorably against numerous competitors in the market. Notably, this fee is lower than that of many comparable options available. In an investor-friendly move, ARK Invest has announced a fee waiver for the initial six months or until the accumulated assets reach the first $1 billion, whichever milestone is achieved first.
As the cryptocurrency market continues to evolve, the demand for Bitcoin ETFs has grown significantly, driven by a myriad of factors that appeal to a broad spectrum of investors. Here are key reasons why investors are increasingly interested in Bitcoin ETFs:
The prospect of regulatory oversight is a key driving force behind the interest in Bitcoin ETFs. Being subject to regulatory scrutiny provides investors with an added layer of protection and transparency. In contrast to the unregulated nature of some cryptocurrency markets, the regulatory oversight associated with ETFs helps alleviate concerns related to fraud and market manipulation.
One of the primary reasons behind the surge in demand for Bitcoin ETFs is the inherent accessibility and convenience they offer. Unlike direct investments in cryptocurrencies, ETFs are traded on traditional stock exchanges.
Investors view Bitcoin as more than just a speculative asset; it has become a potential diversification tool. Bitcoin ETFs allow investors to seamlessly incorporate the cryptocurrency into their investment portfolios without the need to directly hold and manage digital assets. This diversification strategy can be appealing to those seeking to balance their investment portfolios with alternative assets, potentially enhancing risk-adjusted returns.
The U.S. Securities and Exchange Commission (SEC) granted approval to 11 spot Bitcoin exchange-traded funds (ETFs) on January 11, 2024, marking a historic development in cryptocurrency investment. This decision follows persistent efforts by ETF providers to secure approval for spot Bitcoin products and signals a significant shift in the regulatory landscape.
Prior to this decision, the SEC had expressed concerns about the essentially unregulated nature of the Bitcoin market and its vulnerability to manipulation, deeming it a potential risk for ordinary investors. However, the recent green light signifies a change in perspective and a willingness to embrace the evolving landscape of digital assets.
The approved spot Bitcoin ETFs include offerings from prominent financial institutions, reflecting a diverse range of investment options for interested parties. The list comprises BlackRock’s iShares Bitcoin Trust, Valkyrie Bitcoin Fund, ARK 21Shares Bitcoin ETF, Invesco Galaxy Bitcoin ETF, VanEck Bitcoin Trust, WisdomTree Bitcoin Fund, Grayscale Bitcoin Trust, Bitwise Bitcoin ETF, Hashdex Bitcoin ETF, Fidelity Wise Origin Bitcoin Fund, and Franklin Bitcoin ETF.
This development not only expands the range of investment vehicles available to investors but also opens new avenues for engagement with Bitcoin in a more regulated and potentially safer environment. The SEC’s approval represents a significant milestone, as it paves the way for institutional and retail investors alike to participate in the cryptocurrency market through regulated channels.
In a significant development for the cryptocurrency market, the introduction of Spot Bitcoin ETFs is anticipated to bring about a positive transformation. This innovative investment vehicle has the potential to enhance market liquidity, providing a more robust framework for buyers and sellers.
The increased accessibility is expected to make Bitcoin more appealing to ordinary investors who may have been hesitant due to the perceived complexity or high initial investment associated with cryptocurrency. This democratization of access could potentially pave the way for a more diverse range of participants in the market.
One of the key advantages of enhanced liquidity is its potential impact on price stability and reduced volatility. With a greater number of buyers and sellers participating in the market, spot Bitcoin ETFs have the potential to contribute to more stable prices.
The popularity of ETFs as a preferred investment avenue for Americans spans a diverse range of asset classes, including equities, bonds, commodities, currencies, and real estate.
As the landscape evolves, the anticipated arrival of spot Bitcoin ETFs, particularly from prominent players such as Fidelity Investments and the world’s largest asset manager, BlackRock Inc., is poised to draw in a new wave of investors who have, until now, maintained a cautious distance from the realm of cryptocurrencies.
| DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
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