The Bitcoin ETFs Approved So Far

The U.S. Securities and Exchange Commission (SEC) approved the first spot Bitcoin exchange-traded funds in January 2024. These were iShares Bitcoin Trust (IBIT), operated by BlackRock, and Fidelity Wise Origin Bitcoin Trust (FBTC), operated by Fidelity. On the same day, the SEC also approved Grayscale Bitcoin Mini Trust (BTC), which converted from a closed-end fund structure. These three launched and began trading immediately after approval.

In the weeks that followed, the SEC approved additional Bitcoin spot ETFs from other major financial firms. Invesco Bitcoin Trust (BTCO), Valkyrie Bitcoin Trust (BRRR), WisdomTree Bitcoin Trust (BTCW), Franklin Bitcoin Trust (EZBC), and Hashdex Bitcoin Trust (DEFI) all received approval and began trading in January 2024. Each operates under the same basic structure: they hold actual Bitcoin and allow you to buy shares that track its price.

Key Takeaways

  • The SEC approved the first spot Bitcoin ETFs in January 2024, allowing investors to own Bitcoin through a regular brokerage account without using a cryptocurrency exchange.
  • BlackRock's IBIT and Fidelity's FBTC were the first two approved and remain the largest by assets under management.
  • Multiple additional Bitcoin ETFs from established financial firms received approval in the same month, giving investors several options to choose from.
  • All approved Bitcoin spot ETFs hold actual Bitcoin, not Bitcoin futures contracts or derivatives, which was a significant change from previous offerings.

Why the January 2024 Approvals Mattered

Before January 2024, the SEC had rejected or delayed Bitcoin spot ETF proposals for years. The agency had concerns about market manipulation, custody of the underlying Bitcoin, and whether the funds would protect retail investors. The approvals in January represented a shift in the SEC's stance, signaling that these concerns had been addressed to the agency's satisfaction.

The approval of spot Bitcoin ETFs meant that investors could now buy Bitcoin exposure through a regular brokerage account—the same way they buy stocks or mutual funds. This removed the need to open an account on a cryptocurrency exchange, manage private keys, or use a digital wallet. For many traditional investors, this made Bitcoin ownership simpler and more familiar.

How Spot Bitcoin ETFs Differ From Earlier Options

Before the spot ETFs launched, investors who wanted Bitcoin exposure through an ETF had to use Bitcoin futures ETFs. These funds tracked the price of Bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME), not the price of Bitcoin itself. Futures-based ETFs can have tracking differences—meaning their price doesn't always match Bitcoin's price exactly—because of how futures contracts work and the costs of rolling them over.

Spot Bitcoin ETFs hold actual Bitcoin in custody. When you buy shares, the fund is holding the real asset. This means the ETF's price tracks Bitcoin's price much more closely, with minimal tracking difference. For investors comparing options, this is the main practical advantage: you get a more direct price match and lower ongoing costs.

Which Bitcoin ETFs Are Largest by Assets

BlackRock's IBIT and Fidelity's FBTC attracted the most investor money in the months after launch and remain the two largest Bitcoin spot ETFs by assets under management. Both firms have enormous distribution networks and existing relationships with financial advisors and institutional investors, which helped them capture the largest share of inflows.

The other approved Bitcoin ETFs—Grayscale's BTC, Invesco's BTCO, Valkyrie's BRRR, WisdomTree's BTCW, Franklin's EZBC, and Hashdex's DEFI—also operate as spot Bitcoin funds but hold smaller amounts of assets. All of them track Bitcoin's price in the same way. The main differences between them are their expense ratios (the annual fee charged to hold the fund), the firm managing them, and how widely they are available through different brokerages.

What These Approvals Mean for Your Brokerage Account

If you have a brokerage account with a major firm like Fidelity, Charles Schwab, E-Trade, or others, you can now buy Bitcoin ETF shares the same way you buy any other ETF. You search for the ticker symbol (IBIT, FBTC, BTCO, and so on), enter the number of shares you want, and complete the trade. The shares settle in your account like any other security.

You do not need a separate cryptocurrency exchange account, a digital wallet, or knowledge of how to secure private keys. The brokerage holds the shares in your account, and the ETF sponsor holds the Bitcoin in custody. This structure is familiar to anyone who has owned mutual funds or ETFs before. It also means your Bitcoin holdings are covered by the same account protections and tax reporting that apply to other securities in your brokerage account.

Expense Ratios and Ongoing Costs

Each Bitcoin ETF charges an annual expense ratio—a percentage of your investment that goes to the fund sponsor to cover management, custody, and other costs. These ratios vary slightly between funds. BlackRock's IBIT and Fidelity's FBTC both charge relatively low expense ratios compared to earlier Bitcoin investment products, which helped them attract large inflows. Other approved funds charge similar or slightly higher rates.

When comparing Bitcoin ETFs, the expense ratio is worth checking, but the differences are usually small—often less than 0.25% per year. Over time, a lower expense ratio means slightly more of your investment stays invested rather than going to fees. You can find the current expense ratio for any ETF on the fund sponsor's website or through your brokerage.

Frequently Asked Questions

Can I buy these Bitcoin ETFs in a retirement account like an IRA?

Yes. Because these are ETFs traded on regular stock exchanges, they can be held in IRAs, 401(k)s, and other retirement accounts, subject to your plan's rules. Check with your plan administrator or brokerage to confirm, but most major retirement accounts now allow Bitcoin ETF holdings.

Do I have to worry about the Bitcoin being stolen or lost?

The Bitcoin held by the ETF is in custody with a may have access to custodian, typically a major financial institution or specialized digital asset custodian. This is different from holding Bitcoin yourself in a personal wallet. The custodian is responsible for security and insurance. Your ownership is protected through the ETF structure and your brokerage account protections.

Are there Bitcoin ETFs that use futures instead of spot Bitcoin?

Yes. Bitcoin futures ETFs still exist and trade on U.S. exchanges. They track Bitcoin futures contracts rather than the price of Bitcoin itself. Spot Bitcoin ETFs are newer and track Bitcoin's actual price more closely, but futures-based options remain available if you want to compare them.

What happens if the Bitcoin ETF sponsor goes out of business?

If a fund sponsor closes a Bitcoin ETF, the fund would be liquidated and the Bitcoin would be distributed to shareholders or sold to cover the process. Your shares would be converted to cash based on the Bitcoin's value at that time. This is the same process that happens with any ETF closure and is governed by SEC rules.

Do I owe taxes when I buy or sell Bitcoin ETF shares?

Buying and selling shares does not trigger a tax event. You owe capital gains tax only when you sell the shares for a profit (or can claim a loss if you sell at a loss). The tax treatment is the same as any other ETF or stock. Your brokerage will report your transactions on tax forms at year-end.