How to Invest in Bitcoin ETFs & Which One You Should Buy?
Kade Onyx
Tech & Protocols
January 10, 2023, marked a significant milestone as the SEC approved the functioning of Bitcoin ETFs in the United States, endorsing 11 applications, including those from Ark Investments/21 Shares, VanEck, and BlackRock.
The crypto community highly anticipated this decision, as it is expected to positively impact Bitcoin prices and the overall crypto landscape. Investors can now invest in Bitcoin ETFs through traditional brokerage accounts, eliminating the need for major platforms like Coinbase and Binance.
This shift in the investment process has generated excitement among millions of U.S. investors eager to access Bitcoin without relying on large platforms. However, many investors face challenges in understanding how to invest in Bitcoin ETFs and which spot ETF is best suited for them.
To address these concerns, Coin Informer has compiled a detailed guide to clarify the process.
Who Should Buy Bitcoin ETFs?
As SEC Chairman Gary Gensler stated,
"Bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity, including ransomware, money laundering, sanction evasion, and terrorist financing."
While this statement raises concerns, it highlights the risks associated with Bitcoin investments, which lack underlying cash flows and a long trading history to support their value. Investing in Bitcoin through cryptocurrency platforms can be complicated, making Bitcoin ETFs a more conventional option for those looking to invest in digital currency. Bitcoin spot ETFs allow investors to purchase them through brokerage accounts, offering a simpler alternative to direct Bitcoin investments.
The Best Bitcoin ETFs in the United States (As of January 16, 2024)
On January 10, 2024, the SEC approved 11 Bitcoin spot ETFs. As of January 16, the following ETFs are among the top options to consider:
| Rank | ETF Name | Symbol | Asset Class | Total Assets | Expense Ratio |
|---|---|---|---|---|---|
| 1 | ProShares Bitcoin Strategy ETF | BITO | Currency | $1.7 Billion | 0.95% |
| 2 | ProShares Short Bitcoin Strategy ETF | BITI | Currency | $58.5 Million | 0.95% |
| 3 | VanEck Bitcoin Strategy ETF | XBTF | Currency | $54.5 Million | 0.76% |
| 4 | Valkyrie Bitcoin and Ether Strategy ETF | BTF | Currency | $34.5 Million | 1.20% |
| 5 | Global X Blockchain and Bitcoin Strategy ETF | BITS | Multi-Asset | $25.4 Million | 0.65% |
These five ETFs are considered safe choices based on current market trends. BITO, BITI, and XBTF are ideal options for investors looking to enter the Bitcoin ETF market.
Steps to Invest in Bitcoin ETFs via Brokerage Services
Investing in Bitcoin spot ETFs through brokerage services is the most straightforward method. Follow these steps:
Step #1: Choose a Reliable Online Broker Platform
Select a trusted online broker that offers flexibility and reasonable rates for buying ETFs. Recommended brokers include:
- Robinhood: Commission-free and easy trading.
- Interactive Brokers: 24/7 crypto trading with low commissions (0.12% to 0.18%).
- TradeStation: Commission-free with a spread markup not exceeding 1%.
- Coinbase: Spread markup of about 0.5% and allows storing coins in a vault with time-delayed withdrawals.
- Webull: Excellent mobile app with advanced charting tools and a 1% spread markup (commission-free on ETF trading).
Step #2: Open a Brokerage Account
Download the app of your chosen brokerage platform. For instance, if you select Robinhood, open its app or web portal and log in. Complete the KYC (Know Your Customer) process to avoid disruptions.
Step #3: Fund the Brokerage Account
Fund your brokerage account via a linked bank account. You can make a wire transfer, deposit a check, or transfer funds from another broker.
Step #4: Research Before Selecting a Bitcoin ETF
Research the 11 Bitcoin Spot ETFs approved by the SEC. As of the latest trends, consider:
- ProShares Bitcoin Strategy ETF
- VanEck Bitcoin Strategy ETF
- Valkyrie Bitcoin and Ether Strategy ETF
- Global X Blockchain and Bitcoin Strategy ETF
Step #5: Choose Preferred Bitcoin Spot ETFs
After exploring the available Bitcoin ETFs on your broker, select the specific ETFs you wish to invest in.
Step #6: Place an Order Using Funds
Buy the selected Bitcoin ETFs using the funds in your account. Specify the number of shares based on your strategy and market value, then review and submit your order.
Step #7: Regulate & Monitor Your Investments Daily
After placing your order, monitor your investments daily and adjust your strategies as needed to ensure success.
Conclusion
Bitcoin ETFs represent a significant advancement in the crypto landscape. Investors are encouraged to take advantage of this opportunity with an informed approach. For further guidance on purchasing Bitcoin ETFs, refer to this blog post. The Coin Informer team is dedicated to providing the latest crypto updates and news. Stay tuned for more insights.