Spot Bitcoin BTC +1.74% exchange-traded funds (ETFs) have become big business since their initial launch in January 2024. Today, cryptocurrency ETFs account for nearly $150 billion in assets with nearly half of that coming from the iShares Bitcoin Trust (IBIT +1.39%).
But if you're choosing to go with a Bitcoin ETF this year instead of buying Bitcoin directly through one of the exchanges, there are a couple of things you should know first.
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Bitcoin ETFs don't trade 24 hours a day like Bitcoin does
Buying a Bitcoin ETF gives you the same exposure as buying Bitcoin itself. But when you own it through an ETF, you get the trading rules that come with it.
Specifically, Bitcoin ETFs trade during normal market hours. They don't trade around the clock like spot Bitcoin does. If you're a frequent crypto trader, this might make a Bitcoin ETF less attractive.
NASDAQ: IBIT
Key Data Points
You need to consider management fees and expenses
Virtually every ETF comes with a fee known as an expense ratio. The Bitcoin ETFs do as well. The iShares Bitcoin ETF's expense ratio of 0.25% is below average within this category, but it's something that will reduce returns over time. For something that can easily move up or down 5% in a day, a 0.25% annual fee may seem negligible, but it's something to keep in mind.
