Bitcoin (BTC-USD), the world’s largest cryptocurrency has surged nearly 60% so far in 2024. Bitcoin, along with other digital currencies, is expected to trend higher this year due to the advancement of spot ETFs. Even so, some investors are still hesitant to invest in cryptocurrencies owing to the risks involved, including high volatility and the failures of some of the largest crypto exchanges in recent years. We used the TipRanks Bitcoin ETFs Comparison tool to compare three Spot Bitcoin ETFs, iShares Bitcoin Trust Registered (IBIT), Fidelity Wise Origin Bitcoin Fund (FBTC), and ARK 21Shares Bitcoin ETF Ben of Int (ARKB) to determine which is the best pick.
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The TipRanks Compare ETF tool enables the comparison of ETFs based on several parameters, including AUM (assets under management), funds flow, expense ratio, technicals, and performance over different time periods.
More About Bitcoin ETFs
Investors keen on diving into the Bitcoin world can consider investing in Bitcoin ETFs, a relatively safer way to invest in the cryptocurrency. Bitcoin ETFs can be directly purchased from traditional brokers, who also deal in shares, bonds, and other ETFs. The U.S. Securities and Exchange Commission (SEC) approved the trading of Spot Bitcoin ETFs on January 10, 2024, kickstarting the launch of 11 Bitcoin ETFs.
It is important to note that since all spot Bitcoin ETFs track the same single cryptocurrency, Bitcoin, their returns are similar, as seen in the chart below.
iShares Bitcoin Trust Registered (IBIT)
The iShares Bitcoin Trust seeks to replicate the performance of Bitcoin by tracking the CME CF Bitcoin Reference Rate as a benchmark index. IBIT was formed on June 8, 2023, but started trading on January 12, 2024. It is backed by one of the world’s largest investment managers, Blackrock (NYSE:BLK).
Importantly, IBIT currently has an expense ratio of 0.12%. IBIT’s sponsor, Blackrock, has agreed to waive part of the original fee of 0.25% until twelve months or when the ETF reaches $5 billion in assets, whichever is earlier.
As of June 12, IBIT held 305,295.555 units of BTC at a market value of $20.89 billion. Also, it has $17,169.30 worth of cash on its balance sheet. Remarkably, IBIT recently overtook Grayscale Bitcoin Trust (GBTC) in terms of the number of BTC held, as it witnessed massive fund inflows this year. In the past three months, IBIT has seen net fund flows of around $7 billion.
Fidelity Wise Origin Bitcoin Fund (FBTC)
The Fidelity Wise Origin Bitcoin Fund seeks to replicate Bitcoin’s performance, as measured by the Fidelity Bitcoin Reference Rate index. FBTC is issued by Fidelity Investments, one of the largest financial services firms in the world.
FBTC was launched on January 10, 2024, after the SEC’s vital approval of spot ETFs. Notably, Fidelity Investments has completely waived the expense fees until July 31, 2024, following which it will start charging customers 0.25%.
As of March 31, 2024, FBTC held 144,704.480 BTC on its balance sheet. As of date, FBTC has $11.98 billion in AUM, which translates to roughly 179,505.774 BTC at Bitcoin’s closing price on June 13. The net fund flows to FBTC in the past three months amount to approximately $3 billion.
ARK 21Shares Bitcoin ETF (ARKB)
The ARK 21Shares Bitcoin ETF seeks to track Bitcoin’s performance by tracking the CME CF Bitcoin Reference Rate index. Aside from exposure to Bitcoin, ARKB offers investors the crypto expertise of sub-advisor Cathie Wood’s ARK Investment Management and sponsor 21Shares.
ARKB has an expense ratio of 0.21%, which would be the lowest among the three ETFs once the waiver terms of IBIT and FBTC expire. It is noteworthy that even ARKB announced a fee waiver for the first six months or until it reaches $1 billion in assets, whichever is earlier. As of June 12, ARKB held 48,324.17 BTC on its balance sheet while its AUM stood at $3.30 billion. Interestingly, in the past three months, ARKB witnessed net fund inflows of $777 million.
Concluding Thoughts
Based on the AUM and fund flows in the last three months, the iShares Bitcoin Trust Registered ETF is the best pick currently. With the backing of Blackrock and the largest BTC holder tag, IBIT surely has a solid potential for growth going forward.
