Is This Cryptocurrency ETF a No-Brainer Buy?
The emergence of exchange-traded funds (ETFs) that hold nothing but Bitcoin has opened a plethora of new doors. Large-scale financial managers can trade these spot Bitcoin ETFs, and they may be an option in your IRA or 401(k) retirement accounts. Many investors simply prefer a familiar ETF format over opening accounts in a separate crypto-trading service.
Bitcoin ETFs have become increasingly popular
The iShares Bitcoin Trust (NASDAQ: IBIT) has emerged as an early leader with a dominant market value and torrential daily trading volume. But is it a no-brainer buy for Bitcoin investors in 2024? Or should you look at other options before this market leader?
Why the iShares Bitcoin fund stands out in the crowd
The iShares fund family is a household name, managed by the BlackRock financial services empire. Investors find it easy to trust this brand. With $21.2 billion of assets under management, the fund recently passed former Bitcoin fund king Grayscale Bitcoin Trust (NYSEMKT: GBTC), swooning to $20.1 billion from an all-time high of $29.0 billion.
The iShares Bitcoin Trust has a dominant market value
The fund is also heavily traded, with about 38 million iShares Bitcoin ETF shares changing hands on an average day. That works out to roughly $1.5 billion of daily trading value at today’s prices.
Where other funds can challenge iShares
Liquidity and branding power may be enough for most investors, but other funds can put up a fight from a different angle. For instance, the iShares fund’s annual sponsor fee stands at a modest but unexceptional 0.25%. The fund breezed past the $5 billion asset value in February, so the launch-day fee reduction only applies to a small portion of the fund.
Fees comparison among Bitcoin ETFs
The ARK 21Shares Bitcoin ETF (NYSEMKT: ARKB) comes with a lower 0.21% fee ratio (but no waivers anymore). The Bitwise Bitcoin ETF (NYSEMKT: BITB) offers the lowest of all annual fees at 0.20%, and its launch rebates will end on July 12.
Final thoughts on the iShares fund and Bitcoin ETFs in general
While the iShares Bitcoin Trust stands out for its muscular market presence and trading volume, it’s not the only option worth considering. Depending on your investment priorities, other funds like the Ark 21Shares Bitcoin ETF and the Bitwise Bitcoin ETF might be more appealing – especially if you focus on low fees.
“Cryptocurrencies aren’t every investor’s cup of tea.”
And, of course, you’re essentially buying Bitcoin when you invest in any of these funds. Buckle your seat belt because there will be bumps in the road and lots of market turbulence. The oldest and largest cryptocurrency seems destined for game-changing gains in the long run, including a halving-inspired surge over the next year or two, but nothing is guaranteed, and the crypto market can change in a heartbeat. Please make sure you’re prepared for this volatility before buying shares of the iShares Bitcoin ETF or any other crypto-based fund.
