Both ETFs custody Bitcoin through regulated providers – Fidelity Digital Assets and Coinbase Custody Trust.
As 2024 kicked off, the world of investing in cryptocurrencies changed in a big way: The U.S. said “yes” to Bitcoin Exchange-Traded Funds, or ETFs for short.
This was a big deal because it meant people could now invest in Bitcoin just like they would in stocks, without having to actually own Bitcoin directly (much like a gold ETF enables investors to invest in gold without having to keep bars of gold in your house).
These new kinds of funds, especially the ones that track the price of Bitcoin as it goes up and down throughout the day, made it much easier and straightforward for anyone interested in getting into the Bitcoin game.
And as Bitcoin’s value soared to a new all-time high of $73,750, investors are catching the Bitcoin bug again. But with several Bitcoin ETFs out there, how do you know which one is worth your hard-earned investment dollars?
Today, we’re spotlighting two Bitcoin ETFs that stand out from the crowd: the Fidelity Wise Origin Bitcoin Fund (FBTC) and the Franklin Bitcoin ETF (EZBC).
The main factor to be aware of when choosing between Bitcoin ETFs is the expense ratio. This ratio is basically how much it costs you to invest in them. It’s essentially their “management fee” and is important because, aside from this cost, most things about these ETFs are similar.
Both FBTC and EZBC are waving goodbye to their expense ratios (meaning an expense ratio of 0.00%) until August 1, 2024. So, investing in them could be a bit more pocket-friendly.
Another big positive about these ETFs is that they come from large firms in the investment world with billions of dollars in managed assets, making them some of the heavy hitters in the finance game.
This means when you’re putting your money into FBTC or EZBC, you’re investing with firms that have a lot of experience and a major amount of resources.
The Fidelity Wise Origin Bitcoin Fund (FBTC) is a pioneering financial instrument that provides an easier path for investors to gain exposure to Bitcoin without the need to directly purchase and manage the cryptocurrency.
Launched by Fidelity Investments in January 2024, FBTC stands as one of the industry’s first spot bitcoin exchange-traded products.
FBTC distinguishes itself through a combination of simplicity, expertise, and value. Investors can buy and sell FBTC just like any other exchange-traded product, enjoying standard tax reporting and competitive pricing, all without any lockup periods.
An important financial aspect of FBTC is its expense ratio.
Low Expense Ratio and Trustworthy Security
Initially, Fidelity has waived the fee for investing in FBTC, planning to introduce an expense ratio of 0.25% starting August 1, 2024. This decision to waive the fee enhances the appeal of FBTC, making it a more cost-effective option for investors looking to gain exposure to Bitcoin’s performance.
The fund’s underlying Bitcoin is custodied by Fidelity Digital Asset Services, a trusted custody provider regulated by the New York Department of Financial Services (NYDFS) since 2019. This ensures that investors have access to industry-leading security for the digital assets held by the fund. FBTC can be purchased through various account types, including brokerage, trust, and tax-advantaged accounts, offering a blend of accessibility and potential growth tied to Bitcoin’s market dynamics.
Franklin Templeton has a long-standing history of approximately eight decades, with over $1.5 trillion in assets under management, emphasizing the massive scale, the importance of innovation, and adapting to disruptive technologies.
The launch of EZBC is part of Franklin Templeton’s broader strategy to integrate blockchain technology with traditional asset management, offering clients a straightforward way to engage with digital assets. Franklin Templeton Digital Assets, the team behind EZBC, focuses on research and technological development within the digital asset ecosystem, striving to provide investment solutions that simplify clients’ access to digital currencies like Bitcoin.
This ETF Also Has A Low Expense Ratio:
Initially, the Sponsor Fee for EZBC was set at 0.29% but was subsequently reduced to 0.19%, with fees waived to 0.00% until August 2, 2024, for the first $10 billion in fund assets.
This strategic pricing places EZBC among the most competitively priced offerings in its category. Similar to Fidelity Wise Origin Bitcoin Fund (FBTC), the Franklin Bitcoin ETF (EZBC) can also be purchased through various account types, including brokerage, trust, and tax-advantaged accounts.
The Franklin Bitcoin ETF (EZBC) entrusts its holdings to Coinbase Custody Trust Company, which is recognized as one of the largest Bitcoin custodians in the market. Moreover, Franklin Templeton is expanding its footprint in the digital asset space by filing for a Spot Ethereum ETF, showcasing its commitment to providing a diverse range of digital asset investment opportunities to its clients.
Final Thoughts:
These ETFs stand out not only for their waived fees but also for their backing by heavyweight firms, providing a blend of experience and extensive resources.
This makes them prime candidates for investors looking to navigate the exciting but complex world of Bitcoin investing.
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