The landscape of cryptocurrency investing in the United States changed dramatically on January 10, 2024, when the U.S. Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs for trading. This landmark decision marks a pivotal moment in mainstream financial adoption of Bitcoin, the world’s largest cryptocurrency by market capitalization.
For investors, this approval opens the door to direct exposure to Bitcoin through regulated, exchange-traded vehicles—without the need to manage private keys or navigate cryptocurrency exchanges directly. These spot Bitcoin ETFs differ significantly from earlier futures-based products, offering improved cost efficiency, transparency, and ease of access.
👉 Discover how spot Bitcoin ETFs are reshaping the future of digital asset investing.
What Is a Spot Bitcoin ETF?
A spot Bitcoin ETF is an exchange-traded fund that holds actual Bitcoin, not derivatives or futures contracts. This means the fund owns the underlying asset—Bitcoin—purchased at current market prices (the "spot" price). This structure eliminates the complexities and costs associated with rolling over expiring futures contracts, which was a key limitation of earlier Bitcoin investment products.
Prior to 2024, U.S. investors only had access to Bitcoin futures ETFs, such as the ProShares Bitcoin Strategy ETF (BITO), launched in 2021. While BITO provided exposure to Bitcoin price movements, it did so through futures contracts regulated by U.S. authorities like the CFTC. The SEC had previously resisted spot ETF approvals due to concerns about market manipulation and lack of oversight in crypto spot markets.
However, increased regulatory clarity, improved custody solutions, and stronger market infrastructure have led to a shift in stance. The approval of spot Bitcoin ETFs reflects growing confidence in the maturity and resilience of the digital asset ecosystem.
Why Spot ETFs Are Better Than Futures-Based ETFs
The primary advantage of spot Bitcoin ETFs lies in their lower expense ratios and reduced operational friction.
Futures-based ETFs incur recurring costs when rolling contracts forward as they near expiration—a process known as "contango roll yield." These fees eat into returns over time. In contrast, spot ETFs simply hold Bitcoin in secure custody, avoiding these unnecessary expenses.
For example:
- The ProShares Bitcoin Strategy ETF (BITO) charges a 0.95% expense ratio.
- Many new spot Bitcoin ETFs start as low as 0.2%, offering substantial savings over time.
Over long-term holdings, even small differences in fees can compound significantly. A lower expense ratio means more of your returns stay in your portfolio.
Additionally, spot ETFs provide more accurate price tracking of Bitcoin’s actual market value, reducing tracking error compared to futures-based alternatives influenced by contract pricing dynamics.
Key Factors to Consider When Choosing a Bitcoin ETF
When evaluating which spot Bitcoin ETF to invest in, consider three critical factors:
1. Expense Ratio
Lower fees generally mean better long-term performance, all else being equal. Funds with expense ratios under 0.3% are considered highly competitive.
2. Trading Volume and Liquidity
High average daily trading volume ensures tighter bid-ask spreads and easier entry/exit, especially for larger positions. Low-volume ETFs may suffer from poor liquidity, increasing transaction costs.
3. Assets Under Management (AUM)
While not listed here, AUM often correlates with investor trust and institutional adoption. Larger AUM typically indicates stronger market confidence.
👉 Compare real-time performance and fees across top Bitcoin ETFs today.
Complete List of Approved Spot Bitcoin ETFs (Ranked by Fee)
Below is a comprehensive list of all 11 approved spot Bitcoin ETFs, ranked from lowest to highest management fee. For funds with identical fees, ranking is based on average daily trading volume (higher volume first).
Bitwise Bitcoin ETF (BITB)
- Management Fee: 0.20%
- Average Daily Volume: 4 million shares
- One of the lowest-cost options with solid trading activity.
ARK 21Shares Bitcoin ETF (ARKB)
- Management Fee: 0.21%
- Average Daily Volume: 4.7 million shares
- Combines low cost with strong liquidity and transparency.
BlackRock’s iShares Bitcoin Trust (IBIT)
- Management Fee: 0.25%
- Average Daily Volume: 30.3 million shares
- Backed by the world’s largest asset manager; leads in both volume and investor adoption.
Fidelity Wise Origin Bitcoin Trust (FBTC)
- Management Fee: 0.25%
- Average Daily Volume: 14.1 million shares
- Offers institutional-grade custody and strong brand trust.
VanEck Bitcoin Trust (HODL)
- Management Fee: 0.25%
- Average Daily Volume: 0.4 million shares
- Same fee as BlackRock and Fidelity but significantly lower volume.
Franklin Bitcoin ETF (EZBC)
- Management Fee: 0.29%
- Average Daily Volume: 1.5 million shares
- A mid-tier option with moderate liquidity.
WisdomTree Bitcoin Fund (BTCW)
- Management Fee: 0.30%
- Average Daily Volume: 0.1 million shares
- Higher fee and lower volume make it less attractive for active traders.
Invesco Galaxy Bitcoin ETF (BTCO)
- Management Fee: 0.39%
- Average Daily Volume: 1 million shares
- Slightly higher cost but backed by established financial names.
Valkyrie Bitcoin Fund (BRRR)
- Management Fee: 0.49%
- Average Daily Volume: 0.4 million shares
- Memorable ticker symbol, but higher fees may deter cost-conscious investors.
Hashdex Bitcoin ETF (DEFI)
- Management Fee: 0.94%
- Average Daily Volume: 3,000 shares
- Very high fee and minimal liquidity—use with caution.
Grayscale Bitcoin Trust (GBTC)
- Management Fee: 1.50%
- Average Daily Volume: 6.9 million shares
- Once the dominant player, now faces pressure due to its significantly higher fee despite decent volume.
Frequently Asked Questions (FAQ)
Q: What is the difference between a spot Bitcoin ETF and a futures-based Bitcoin ETF?
A: A spot Bitcoin ETF holds actual Bitcoin at current market prices, while a futures-based ETF uses contracts that speculate on future prices. Spot ETFs avoid rollover fees and offer more direct exposure.
Q: Which spot Bitcoin ETF has the lowest fee?
A: The Bitwise Bitcoin ETF (BITB) has the lowest management fee at just 0.20%.
Q: Is Grayscale’s GBTC still a good investment?
A: GBTC offers high liquidity and brand recognition, but its 1.5% fee is much higher than competitors. Investors should weigh this cost against convenience and historical performance.
Q: Can I buy these ETFs through my regular brokerage account?
A: Yes, all approved spot Bitcoin ETFs trade on major U.S. exchanges like any other stock or ETF.
Q: Do spot Bitcoin ETFs pay dividends?
A: No, these funds do not generate income or pay dividends. Returns are based solely on Bitcoin’s price appreciation.
Q: Are spot Bitcoin ETFs safe?
A: They are regulated by the SEC and hold Bitcoin in secure custodial arrangements, making them safer than holding crypto directly for many investors.
Bitcoin remains a highly volatile asset, and these ETFs inherit that volatility. While they offer convenient, low-cost access to Bitcoin through traditional investment accounts, investors should carefully assess their risk tolerance and investment goals before committing capital.
With fees ranging from 0.2% to 1.5%, choosing the right fund can make a meaningful difference in long-term returns. As the market evolves, expect further consolidation, fee reductions, and increased institutional participation.
👉 Stay ahead of the curve—explore how spot Bitcoin ETFs can fit into your investment strategy.