Three Bitcoin ETFs Have Launched, Which Is Most Attractive?

In recent days, three newly-launched Bitcoin exchange-traded funds (ETFs) were launched. All of them follow a similar pattern for following Bitcoin futures instead of following the current price of Bitcoin. If you’re looking to get Bitcoin exposure within your portfolio, What ETF is the most suitable?

First Mover

Most of the time, the first ETF in a specific category may get the most assets. We’ve seen this when it comes to Bitcoin ETFs. The ProShares Bitcoin Strategy ETF (BITO) is the first to go live and has more than one billion dollars in assets. It’s a rapid ramp-up for a brand new fund.

But, we can also find the VanEck Bitcoin Strategies ETF (XBTF) and the Valkyrie Bitcoin Strategy ETF (BTF). In essence, these are all similar in having Bitcoin futures to monitor how much Bitcoin price.

Theoretically, there are alternative methods available for tracking what is known as the Bitcoin cost per spot. However, it is the case that it is not the case that SEC has not yet approved these methods in a U.S. Structure of ETFs as of yet. Far, and so do the current ETFs tracking futures.

If you’re interested in tracking the Bitcoin price and following the price, you can use the Grayscale Bitcoin Trust (GBTC) as a possible investment choice. However, it has a substantial annual fee of 2% and isn’t organized as an ETF in the present. Furthermore, since February of this year, it has been trading at a loss concerning its Bitcoin accounts.

The Lowest Cost

Since investing strategies used by three Bitcoin ETFs have similar performance, they might be the same, so choosing the cheapest ETF could be a sensible strategy. In this instance, it’s the VanEck Bitcoin Strategy ETF that costs 0.65 percent per year. This means that you’ll pay $65 per year for each 10,000 you put into.

Fees for ProShares and Valkyrie’s offerings are currently higher. ProShares and Valkyrie’s offer is now higher, at 0.95 percent. The expense ratio will likely be the main expense when you’re a long-term investor in the ETF. If you frequently trade or frequently, the ProShares offering could be the right choice due to its size currently being larger. This could result in better liquidity, and fewer bid/ask spreads. Three ETFs also have tax structures that are slightly different as well, which could be a problem for long-term investors.

Additional Changes

We’re likely to be in the early days in the world of cryptocurrency funds. An ETF that tracks the spot price of Bitcoin instead of trading on the market for futures is expected to get approval at some point over the following years. There are benefits and disadvantages of tracking spot prices. They are more reliable than futures. A fund that tracks spot prices. Bitcoin doesn’t mean it’s better.

Additionally, an ETF that blends different cryptocurrency assets and thus can offer a broader range of diversification could be announced shortly. But, at present, three ETFs are following the same Bitcoin strategies. Having the one with the lowest fees from VanEck could be a good choice at present for investors who are looking to maximize the returns of all three ETFs could be comparable.

The fact is that innovation is speeding up, and more ingenious and lower-cost cryptocurrency ETFs might be arriving fairly soon. Thus, today’s research on the most suitable ETF could quickly become outdated. However, the general rule of selecting less expensive ETFs when the investment strategies are comparable could help you achieve long-term returns.

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Robert Scoble
Robert is the assistant managing editor for HC News, overseeing coverage of markets, companies, strategy and business leaders. Originally from Boston, Scoble began his journalism career in 1997 & now resides outside New York.

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