For the first time in history, most American investors can buy and sell Bitcoin (CRYPTO: BTC) assets in their stock brokerage accounts. The emergence of exchange-traded funds (ETFs) that hold nothing but Bitcoin opens a plethora of new doors. Large-scale financial managers can trade these spot Bitcoin ETFs. They may be an option in your IRA or 401(k) retirement accounts. Many investors simply prefer a familiar ETF format over opening accounts in a separate crypto-trading service.
It’s still early, less than five months after the launch of the first 11 spot Bitcoin ETFs. However, the iShares Bitcoin Trust (NASDAQ: IBIT) has emerged as an early leader with a dominant market value and torrential daily trading volume.
Is the iShares ETF a no-brainer buy for Bitcoin investors in 2024? Or should you look at other options before this market leader?
Why the iShares Bitcoin fund stands out in the crowd
The iShares fund family is a household name. Managed by the BlackRock financial services empire, investors find it easy to trust this brand. Check out the top 100 largest ETFs, sorted by the amount of assets under management (AUM), and you’ll find 39 iShares funds on that list today. Runner-up Vanguard boasts 30 top-100 funds, followed by crickets and tumbleweeds until you reach State Street‘s SPDR fund family with 16 names.
The Bitcoin fund is no exception, found in the lower half of that top-100 list. That’s no small feat in a market with more than 3,500 ETFs to choose from. With $21.2 billion of AUM, the fund recently passed former Bitcoin fund king Grayscale Bitcoin Trust (NYSEMKT: GBTC), swooning to $20.1 billion from an all-time high of $29.0 billion.
The fund is also heavily traded. About 38 million iShares Bitcoin ETF shares are changing hands on an average day. That works out to roughly $1.5 billion of daily trading value at today’s prices. The Grayscale ETF stops at $713 million and Fidelity Wise Origin Bitcoin (NYSEMKT: FBTC) lands in third place with $593 million in daily dollar volume.
So, the iShares ETF has a comfortable lead over the largest contenders in terms of market scale, liquidity, and brand-name laurels.
Where other funds can challenge iShares
Liquidity and branding power may be enough for most investors, but other funds can put up a fight from a different angle.
For instance, the iShares fund’s annual sponsor fee stands at a modest but unexceptional 0.25%. The fund breezed past the $5 billion asset value in February, so the launch-day fee reduction only applies to a small portion of the fund. Fidelity is waiving its fee until Aug. 1, when the rate will jump to the same 0.25% standard. The ARK 21Shares Bitcoin ETF (NYSEMKT: ARKB) comes with a lower 0.21% fee ratio (but no waivers anymore). The Bitwise Bitcoin ETF (NYSEMKT: BITB) offers the lowest of all annual fees at 0.20%, and its launch rebates will end on July 12.
