Bitcoin ETFs like FBTC (Fidelity Wise Origin Bitcoin Fund) and GBTC (Grayscale Bitcoin Trust) offer investors regulated exposure to Bitcoin without direct cryptocurrency management. This guide compares their fees, performance, and suitability for different investment strategies.
Quick Comparison: FBTC vs. GBTC
FBTC Highlights
- Issuer: Fidelity Investments
- Fee: 0.25% (waived until August 2024)
- BTC Holdings: 181,087 BTC (self-custody)
- Pros: Low fees, direct Bitcoin exposure, liquidity.
- Cons: Tracking risk, no direct BTC ownership.
GBTC Highlights
- Issuer: Grayscale Investments
- Fee: 1.50%
- BTC Holdings: 270,770 BTC (Coinbase custody)
- Pros: Longest track record, OTC accessibility.
- Cons: High fees, historically trades at premium/discount.
Key Differences
Fees
- FBTC: 0.25% post-waiver.
- GBTC: 1.50% (highest among spot Bitcoin ETFs).
Performance
- FBTC tracks spot Bitcoin prices more closely.
- GBTC’s price may deviate from NAV due to market demand.
Liquidity
- FBTC trades like a traditional ETF.
- GBTC’s OTC structure may affect liquidity.
Investment Considerations
- Cost-Conscious Investors: FBTC’s lower fees enhance long-term returns.
- Legacy Preference: GBTC suits those prioritizing established products despite higher costs.
- Alternatives: Consider direct Bitcoin ownership via platforms like Swan Bitcoin for full control.
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FAQ
Q: Which ETF has lower fees?
A: FBTC (0.25%) vs. GBTC (1.50%).
Q: Does GBTC hold actual Bitcoin?
A: Yes, via Coinbase custody.
Q: Are there tax advantages?
A: Both fit into IRAs; consult a tax advisor.
Conclusion
- Choose FBTC for cost efficiency.
- Opt for GBTC if willing to pay a premium for legacy trust.
- Self-custody remains the gold standard for Bitcoin ownership.