The Best Bitcoin ETFs to Buy Now

Bitcoin ETFs have become a popular investment option for those looking to gain exposure to Bitcoin without owning the cryptocurrency directly. As of 2024, several Bitcoin ETFs are on the market, each with its own set of features, benefits, and risks. In this article, we will explore some of the top Bitcoin ETFs available for investment, evaluating their performance, fees, and overall suitability for different types of investors.

1. Purpose Bitcoin ETF (BTCC)

The Purpose Bitcoin ETF (BTCC) was one of the first Bitcoin ETFs to launch in North America, and it has quickly gained a reputation for its robust performance. Here are some key details:

• Performance: The Purpose Bitcoin ETF has shown strong performance since its inception, closely tracking the price of Bitcoin.
• Fees: It charges a management fee of 1.00%, which is relatively competitive compared to other Bitcoin ETFs.
• Liquidity: With high trading volumes, BTCC offers good liquidity, making it easy for investors to buy and sell shares.

Pros:

• Early mover advantage
• High liquidity
• Competitive fees

Cons:

• Higher management fees compared to some newer ETFs

2. Grayscale Bitcoin Trust (GBTC)

The Grayscale Bitcoin Trust (GBTC) is another prominent player in the Bitcoin ETF space. Although technically not an ETF, it operates similarly and is often considered by investors as a Bitcoin investment vehicle.

• Performance: GBTC has historically traded at a premium to the underlying Bitcoin price, though this premium has fluctuated.
• Fees: GBTC charges a relatively high fee of 2.00%, which is a significant consideration for long-term investors.
• Liquidity: GBTC is highly liquid, but its premium/discount to NAV can affect the value for investors.

Pros:

• Established and well-known
• High liquidity

Cons:

• High management fee
• Premium/discount fluctuations

3. Valkyrie Bitcoin Strategy ETF (BTF)

The Valkyrie Bitcoin Strategy ETF (BTF) is a newer entry in the Bitcoin ETF market, focusing on Bitcoin futures rather than holding actual Bitcoin.

• Performance: BTF’s performance is tied to Bitcoin futures contracts, which can differ from the spot price of Bitcoin.
• Fees: It charges a management fee of 0.95%, which is slightly lower than GBTC but higher than BTCC.
• Liquidity: BTF offers decent liquidity but may experience volatility due to its futures contracts.

Pros:

• Lower fees compared to GBTC
• Focus on futures contracts

Cons:

• Performance may not perfectly track Bitcoin’s spot price
• Potential for increased volatility

4. ProShares Bitcoin Strategy ETF (BITO)

The ProShares Bitcoin Strategy ETF (BITO) was the first Bitcoin futures ETF to launch in the U.S., and it remains a popular choice among investors.

• Performance: BITO’s performance is based on Bitcoin futures contracts and may differ from Bitcoin’s spot price.
• Fees: BITO charges a management fee of 0.95%, which is on par with other Bitcoin futures ETFs.
• Liquidity: BITO is known for its strong liquidity and has seen significant trading volumes.

Pros:

• High liquidity
• Pioneer in Bitcoin futures ETFs

Cons:

• Performance may vary from spot Bitcoin prices
• Subject to futures contract roll costs

5. VanEck Bitcoin Strategy ETF (XBTF)

The VanEck Bitcoin Strategy ETF (XBTF) is another Bitcoin futures ETF, offering a competitive alternative for investors.

• Performance: XBTF also tracks Bitcoin futures, which can lead to performance discrepancies with spot Bitcoin prices.
• Fees: It has a management fee of 0.65%, the lowest among Bitcoin futures ETFs, making it an attractive option for cost-conscious investors.
• Liquidity: XBTF is relatively new but has shown strong liquidity since its launch.

Pros:

• Lowest management fees among Bitcoin futures ETFs
• Good liquidity

Cons:

• Performance may differ from spot Bitcoin
• Newer ETF with a shorter track record

Conclusion

Choosing the best Bitcoin ETF depends on your investment goals, risk tolerance, and cost sensitivity. Purpose Bitcoin ETF (BTCC) stands out for its direct exposure to Bitcoin and competitive fees, while Grayscale Bitcoin Trust (GBTC) offers established liquidity but with higher fees and potential premium/discount issues. For those interested in futures-based exposure, Valkyrie Bitcoin Strategy ETF (BTF), ProShares Bitcoin Strategy ETF (BITO), and VanEck Bitcoin Strategy ETF (XBTF) provide various options, with VanEck’s XBTF being notable for its lower fees.

Ultimately, investors should consider their specific needs and preferences when selecting a Bitcoin ETF, keeping in mind the underlying strategies, fee structures, and performance characteristics of each option.