Spot Bitcoin ETFs have done well this year, helped by the strong performance of Bitcoin. This week, the BTC coin made a strong bullish breakout and moved to a three-year high of $64,000. Analysts believe that it is just a matter of time before the coin blasts above its all-time high of $69,000.
Bitcoin vs Bitcoin ETF
I have long believed that investing in Bitcoin itself is the best way to gain exposure in the crypto industry. As such, I advocated for the coin instead of the ProShares Bitcoin Strategy ETF (BITO) and other affiliated stocks like Coinbase and Marathon Digital.
I still believe that investing in Bitcoin is a better approach than buying the recently launched spot ETFs. It is a cheaper option since all you need to do is to buy the coin and store it in a cold or hot wallet and pay no fees.
However, I also realize that investing in Bitcoin can be a tough call, especially among large investors. This explains why many institutional investors are buying the recently launched spot Bitcoin ETFs.
FBTC vs IBIT ETFs
Therefore, my goal in this article is to compare between the two biggest spot BItcoin ETFs: iShares Bitcoin Trust (IBIT) and Fidelity Wise Origin Bitcoin (FBTC) funds. I also understand that the Grayscale Bitcoin Trust (GBTC) is the biggest fund in the industry. But as I have warned before, paying a 1.5% expense ratio is not recommended.
The FBTC and IBIT are similar financial assets and will always trade in the same direction. Indeed, they have all jumped by more than 32% since going public in January this year. This is a similar price action to what happened in Bitcoin.
The only difference between the two is the fees charged and the assets in their ecosystem. According to its website, the Fidelity Wise Origin Bitcoin ETF has an expense ratio of 0.25% and over $2.5 billion in assets. Similarly, the IBIT ETF has over $9.4 billion and an expense ratio of 0.25%.
In terms of fees, therefore, FBTC seems like a better spot Bitcoin ETF to invest in because Fidelity has waived its fees until July of this year. This means that investors are saving a good amount of money in this period.
Therefore, for now, I think that the FBTC is a better investment than IBIT. Starting from July this year, however, the two will be alike. Their stocks will continue moving in the same direction while their liquidity will remain at an elevated level.
Of course, there are other smaller spot Bitcoin ETFs like those from Franklin Templeton and BitWise. These funds provide exposure to Bitcoin and charge smaller fees. However, they are relatively illiquid, making it a bit difficult for me to recommend them.
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