Bitcoin ETFs
Bitcoin almost at all-time highs so we have updated the post below.
After years of saying no to repeated request the U.S. Securities and Exchange Commission has finally approved a bitcoin ETF and on Thursday 11 January 2024 eleven of them started trading.
The first question is why an ETF when you could buy bitcoin on any number of exchanges? Well a couple of reasons not the least being that bitcoin exchanges aren’t always the safest. Last year local bitcoin exchange, Revix, announced that 24% of clients crypto was gone. Before that FTX went bust and this is trend that goes all the way back to Mt. Gox that disappeared after a hack in 2014.
So an ETF should be safer? Probably, but where is the bitcoin ETF issuers keeping their crypto and are they safe? Probably, but let’s be clear, crypto remains a Wild West.
Being traded on a traditional exchange also means it’s an easy purchase or sale without having to open a new account with a crypto exchange. For many this may not seem like a big deal, but it does remove some friction from the process.
I would also add that many expect large institutions to rush in now and buy bitcoin ETFs, sending the price much higher. I think this is unlikely. Certainly some will, but the majority probably have no interest and the small overall market cap of bitcoin (less than US$1trillion as I write) means no seriously large player can take a large stake when you consider Apple and Microsoft are each nearly US$3trillion market caps.
Will we see other crypto ETFs? In time I would think it is very likely, but for now it’s just bitcoin.
Below is the full list, importantly many are discounting their fee to zero for a period of anything from one to six months. But I have ignored this. I also suspect we’ll see fees dropping in time.
Which would I buy? Well firstly I hold bitcoin in a hardware wallet (as should you, really you must) and don’t want any more. But I do like the VanEck code of HODL, but otherwise stick to a large name issuer you recognise.
Bitcoin is now almost back at all-time highs as I update this post, chart below and the US ETFs lower down.
Why is Bitcoin running?
Well all these new ETFs have been buying as clients buy the ETF and we also have the halving coming up next month. I interviewed Petri Redelinghuys from Herenya Capital Advisors on the halving, he starts at 14:20.
The TERs are in some cases special deals for a limited period.
| Issuer | Name | Code | Fee |
|---|---|---|---|
| Bitwise | Bitwise Bitcoin Trust | BITB | 0.20% |
| ARK Invest & 21 Shares | ARK 21Shares Bitcoin ETF | ARKB | 0.21% |
| BlackRock | iShares Bitcoin Trust | IBIT | 0.25% |
| Fidelity | Fidelity Wise Origin Bitcoin Trust | FBTC | 0.39% |
| VanEck | VanEck Bitcoin Trust | HODL | 0.20% |
| Franklin Templeton | Franklin Bitcoin ETF | EZBC | 0.19% |
| Wisdom Tree | Wisdom Tree Bitcoin Trust | BTCW | 0.25% |
| Invesco and Galaxy | InvescoGalaxy Bitcoin ETF | BTCO | 0.25% |
| Valkyrie | Valkyrie Bitcoin Fund | BRRR | 0.25% |
| Grayscale | Grayscale Bitcoin Trust | GBTC | 1.5% |
| Hashdex | Hashdex Bitcoin ETF | DEFI | 0.90% |
ETF blog
At Just One Lap, we are big fans of passive investment using ETFs. In this weekly blog, we discuss ETFs on the local market and the factors you need to consider when choosing an ETF. If you have wondered how one ETF differs from another, this is where you can find out. We explain which index each ETF tracks, what type of portfolio could benefit from holding each ETF, and how the costs will affect your bottom line.
