In this article, we'll cover the basics of how to invest in the iShares Bitcoin Trust ETF. You'll learn how this spot Bitcoin ETF works and explore the pros and cons of investing in the fund.
Exchange-Traded Fund (ETF)
Does the iShares Bitcoin Trust ETF pay a dividend?
The iShares Bitcoin Trust ETF doesn't pay dividends because Bitcoin doesn't produce dividends. Any profits you earn from investing in a spot Bitcoin ETF are due to increases in the price of Bitcoin. That's important to keep in mind because when you invest in a stock ETF, you'll typically earn dividends that get reinvested unless you opt to receive them in cash, which can, in turn, boost your returns.
Dividends can soften the impact of lousy stock market returns, but you won't get this cushion if you invest in the iShares Bitcoin Trust ETF. If dividends are important to your investment strategy, consider a top dividend ETF instead.
What is the iShares Bitcoin Trust ETF's expense ratio?
An ETF expense ratio is the percentage of an investment that is allocated to fees. The best ETFs to invest in typically have low expense ratios. After all, a higher fee means less of your money gets invested.
ETF Expense Ratio
The bottom line on the iShares Bitcoin Trust ETF
The iShares Bitcoin Trust ETF and other spot Bitcoin ETFs make it easier to get direct Bitcoin exposure through a brokerage account. However, like Bitcoin, the iShares Bitcoin Trust ETF isn't appropriate for everyone. Only invest if you're comfortable with dramatic price swings and you're willing to hold the fund for the long term. Limit your stake to a small percentage of your overall investments, ideally 5% or less.
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