Your Guide to the SEC’s 11 Spot Bitcoin ETF Approvals

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Your Guide to the SEC's 11 Spot Bitcoin ETF Approvals

The U.S. Securities and Exchange Commission (SEC) has given the green light to 11 new Spot Bitcoin ETFs, opening up new avenues for investors. In this comprehensive guide, we’ll take a deep dive into the world of Spot Bitcoin ETFs, explore their significance, and analyze the specific funds that have received approval.

TL;DR – Key Takeaways:

  • The SEC has approved 11 Spot Bitcoin ETFs for trading in the United States, marking a significant milestone in the world of cryptocurrency investments.
  • Spot Bitcoin ETFs differ from previous Bitcoin futures ETFs, as they directly invest in Bitcoin itself, ensuring a closer correlation with Bitcoin’s price.

What’s the Difference Between a Spot vs. Futures ETF?

Before we delve into the details of the approved ETFs, it’s essential to understand the distinction between Spot Bitcoin ETFs and their futures counterparts. While Bitcoin futures ETFs have been in existence, Spot Bitcoin ETFs directly invest in the underlying asset, Bitcoin, rather than Bitcoin futures contracts.

This distinction is critical because ETFs based on futures can sometimes deviate from the actual price of Bitcoin due to various factors. Spot Bitcoin ETFs, on the other hand, closely mirror the price of Bitcoin as the issuer directly buys or sells and holds Bitcoin itself. Additionally, futures-based ETFs often come with higher costs and increased complexity. This is what makes spot ETFS clearly a big deal.

Related: BlackRock Takes First Step Towards Spot Ether ETF

What the ETFs Mean for Bitcoin and Investors

The approval of these Spot Bitcoin ETFs marks a significant milestone for Bitcoin, but it’s important to manage expectations. In the short term, much of the excitement surrounding these ETFs may already be factored into Bitcoin’s price due to earlier anticipation and speculation.

However, in the long run, these ETFs offer several advantages:

Accessibility for All: They enable investors who previously hesitated to buy and manage Bitcoin directly to invest through traditional brokerage accounts, similar to purchasing stocks or ETFs.

Inclusion in Retirement Accounts: Individual investors can now include Bitcoin exposure in their retirement accounts, potentially diversifying their portfolios.

Institutional Interest: The regulated nature of these ETFs could attract more institutional investors to the Bitcoin market.

Expansion of Investor Base: These ETFs may introduce Bitcoin to a broader investor base, potentially driving adoption and mainstream acceptance.

Related: What Makes 2024 a Pivotal Year For Crypto and NFTs

What Does This Mean for NFTs?

The approval of Spot Bitcoin ETFs carries implications beyond Bitcoin itself; it potentially has a ripple effect on the broader cryptocurrency ecosystem, including Non-Fungible Tokens (NFTs).

Increased Cryptocurrency Attention: The approval of Bitcoin ETFs attracts mainstream media attention and sparks discussions about cryptocurrencies’ legitimacy and adoption. This heightened visibility could indirectly benefit NFTs by drawing more interest to the broader crypto space.

Rising Institutional Interest: As Bitcoin becomes more accessible through ETFs, institutional investors may explore other cryptocurrencies and digital assets, including NFTs. Institutions seeking diversified exposure to the crypto market may consider NFTs as part of their investment strategy.

Blockchain Technology Recognition: ETF approval signifies a level of recognition and acceptance of blockchain technology. NFTs, which rely on blockchain, could benefit from increased trust and understanding of the technology behind them.

While the direct impact on NFTs remains to be seen, the recent approval of Bitcoin ETFs is a positive step for the entire cryptocurrency ecosystem. As interest in cryptocurrencies and blockchain continues to grow, NFTs could easily find themselves in the spotlight, attracting both collectors and investors alike.

Related: Easy NFT Checkout: Buy NFTs with Credit Card for Seamless Transactions

Now, let’s take a closer look at the 11 newly approved Spot Bitcoin ETFs and their key details:

1. ARK 21Shares Bitcoin ETF (ARKB)

  • Expense Ratio: 0.21%
  • Key Highlights: ARKB, backed by ARK Invest, offers a competitively low expense ratio, making it an attractive option for investors.

About ARKB: ARK Invest founder and CIO Cathie Wood has been a longtime supporter of Bitcoin, and now her firm has its own Bitcoin ETF, ARKB. ARK Invest is best known for its actively managed, tech-focused funds like the ARK Innovation ETF (ARKK). ARKB features a reasonable expense ratio of 0.21%. As you’ll see, this is cheaper than that of many of its competitors listed below. As a side note, ARK will also waive this fee for the first six months or on the first $1 billion of assets invested, whichever comes first. ARK Invest’s fund will trade on the CBOE.

2. Bitwise Bitcoin ETP Trust (BITB)

  • Expense Ratio: 0.20%
  • Key Highlights: BITB, sponsored by Bitwise, offers a fee structure similar to ARKB and is poised to gain visibility in the market.

About BITB: Like ARKB, BITB is reasonably priced, with a fee of 0.20%. Like ARK Invest, fund sponsor Bitwise will also waive this fee for the first six months or for the first $1 billion in investments that it accrues, whichever comes first. Note that this isn’t Bitwise’s first rodeo, as the asset manager also offers a number of additional crypto-related ETFs, including the Bitwise 10 Crypto Index Fund (OTC:BITW), which invests in an index of the top 10 cryptocurrencies by market cap, the Bitwise Crypto Industry Innovators ETF (NYSEARCA:BITQ), and other funds related to Bitcoin and Ethereum (ETH-USD) futures.

3. Fidelity Wise Origin Bitcoin Trust (FBTC)

  • Expense Ratio: 0.25%
  • Key Highlights: FBTC, managed by Fidelity, boasts a fee waiver until July 31, 2024, making it a compelling choice for investors.

About FBTC: FBTC is the offering from asset management giant Fidelity, which already allows customers to buy Bitcoin and Ethereum in their brokerage accounts. FBTC will trade on the CBOE and features a moderate expense ratio of 0.25%. Note that this fee will be waived until July 31, 2024, significantly boosting FBTC’s allure.

4. Franklin Bitcoin ETF (EZBC)

  • Expense Ratio: 0.29%
  • Key Highlights: EZBC by Franklin Templeton enters the market with a competitive expense ratio, although no fee waiver is in place.

About EZBC: The Franklin Bitcoin ETF is Franklin Templeton’s offering in the space. EZBC will trade on the CBOE and charge a moderate 0.29%, although no fee waiver is in place.

5. Grayscale Bitcoin Trust (GBTC)

  • Expense Ratio: 1.5%
  • Key Highlights: While GBTC isn’t a new offering, it’s undergoing conversion into an ETF. GBTC already has a market cap of $28 billion.

About GBTC: GBTC is not a “new” offering. It launched as a trust in 2013. However, Grayscale is now converting this trust into an ETF. GBTC already has a market cap of $28 billion. Grayscale deserves credit for being early to the game, but with an expense ratio of 1.5%, it’s hard to make a case for buying GBTC instead of one of the more cost-effective options listed above.

6. Hashdex Bitcoin ETF (DEFI)

  • Expense Ratio: 0.90%
  • Key Highlights: DEFI, offered by Brazil’s Hashdex, provides an international perspective on Bitcoin investment.

About DEFI: DEFI will trade on the NYSE and features an expense ratio of 0.90%. It is an offering from Brazil’s Hashdex, a crypto-native asset manager that offers a large number of crypto-related funds internationally.

7. Invesco Galaxy Bitcoin ETF (BTCO)

  • Expense Ratio: 0.39%
  • Key Highlights: BTCO, a collaboration between Invesco and Galaxy Digital Holdings, offers a reasonable expense ratio, with a fee waiver in place.

About BTCO: BTCO is an offering from traditional asset manager Invesco (NYSE:IVZ) and digital asset management firm Galaxy Digital Holdings (OTC:BRPHF). It will trade on the CBOE, and it charges 0.39% (though this fee will be waived for the first six months or the first $5 billion in assets under management).

8. iShares Bitcoin Trust (IBIT)

  • Expense Ratio: 0.12% (first year) / 0.25% (afterward)
  • Key Highlights: IBIT garnered attention as BlackRock, a major asset manager, applied for a Spot Bitcoin ETF. It offers competitive fees.

About IBIT: IBIT will charge an expense ratio of 0.12% for the first year (or the first $5 billion in AUM, whichever comes first), after which this fee will increase to a still-reasonable 0.25%.

9. Valkyrie Bitcoin Fund (BRRR)

  • Expense Ratio: No fee for the first three months / 0.49% afterward
  • Key Highlights: Valkyrie introduces BRRR with a fee waiver for the initial three months, potentially attracting investors.

About BRRR: BRRR will trade on the Nasdaq. Valkyrie will charge no fee for the first three months and then 0.49% after that. Valkyrie has several other Bitcoin-related funds, including the Bitcoin Miners ETF (NASDAQ:WGMI) and several other products related to Bitcoin, Ethereum, and other cryptocurrencies.

10. VanEck Bitcoin Trust (HODL)

  • Expense Ratio: 0.25%
  • Key Highlights: HODL by VanEck presents a straightforward fee structure and experience in cryptocurrency investments.

About HODL: VanEck’s aptly named HODL will charge 0.25%. VanEck has experience in cryptocurrency with products like its VanEck Digital Transformation ETF (NASDAQ:DAPP) and a Bitcoin mining ETF (which recently closed down). HODL will trade on the CBOE.

11. WisdomTree Bitcoin Trust (BTCW)

  • Expense Ratio: 0.3%
  • Key Highlights: BTCW offers competitive fees and the potential for a fee waiver in the early stages.

About BTCW: WisdomTree’s BTCW will charge 0.3% and trade on the CBOE. This fee will be waived for the first six months or the first $1 billion in AUM.

Conclusion: Evaluating the Choices

The approval of these ETFs signifies a significant moment for Bitcoin and crypto as a whole, though much of the initial excitement may already be reflected in its price. Nevertheless, these ETFs present diverse options for investors looking to access Bitcoin through traditional brokerage accounts.

Each ETF offers unique features and fee structures, catering to a wide range of investors. It’s crucial for investors to conduct thorough research and consider their investment goals when choosing among these ETFs. With the introduction of Spot Bitcoin ETFs, the world of cryptocurrency investments has become more accessible, offering numerous opportunities for both seasoned and novice investors. And that’s something clearly NFTpay can get behind!

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