Following the approval of spot Bitcoin ETFs (Exchange-Traded Funds) by the US Securities and Exchange Commission on January 10th, there is a growing expectation that BTC will witness significant institutional adoption over the coming months.
The ETFs are considered a game-changer since they allow retail and institutional investors to inject money into Bitcoin, the biggest cryptocurrency by market capitalization, without holding it. Today, instead of purchasing BTC on crypto exchanges like Coinbase and Binance, you can acquire the Exchange-Traded Fund to get exposure to Bitcoin.
Approved Spot Bitcoin ETFs
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The Securities and Exchange Commission gave the green light to 11 spot Bitcoin ETFs. The following ETFs were approved: BlackRock’s iShares Bitcoin Trust, the Grayscale Bitcoin Trust, VanEck’s Bitcoin Trust, the Hashdex Bitcoin ETF DEFI, the Franklin Templeton Bitcoin ETF, Valkyrie’s Bitcoin Fund, the Fidelity Wise Origin Bitcoin Trust, WisdomTree’s Bitcoin Fund, and ARK 21 Shares Bitcoin ETF, Invesco Galaxy’s Bitcoin ETF, and Bitwise’s Bitcoin ETF.
These ETFs have been listed on several US-based stock exchanges, including the NASDAQ, the New York Stock Exchange, and the Chicago Board Options Exchange.
Before approving spot Bitcoin ETFs, the Securities and Exchange Commission had allowed Bitcoin futures ETFs, which track agreements to purchase or sell Bitcoin at a pre-defined price, to enter the market in late October 2021. Proshares’ Bitcoin Strategy ETF was one of the Bitcoin futures ETFs that the Commission approved.
Where Can You Buy Spot Bitcoin ETFs?
Brokerage Accounts
As of this writing, spot Bitcoin ETFs are listed on brokerage firms like Fidelity, Interactive Brokers, Charles Schwab, and Robinhood.
Crypto Exchanges
Although no cryptocurrency exchange has listed spot Bitcoin ETF for customers to buy, Kraken announced earlier this month that it will launch its ETF trading service this year and list the ETFs.
Financial Advisers
The latest report by Bitwise indicates that most American financial advisers are now interested in buying Bitcoin ETFs in customer accounts. Moreover, 97% of the advisers who have been buying Bitcoin in client accounts are planning to enhance that exposure this year.
Robo-Advisors
Robo-advisors, investing platforms that provide automated portfolio management, are making it possible for investors to buy spot Bitcoin ETFs. And considering they have low minimum investment requirements, they are ideal for all investors.
Traditional Banks
If you want to buy Bitcoin ETF via a traditional bank, the financial institution will require you to create a brokerage account with its investment department. Once you fund and activate your account, you can access all spot Bitcoin ETFs. It is worth highlighting that not many banks support Bitcoin ETF trading, and this is largely due to the unclear regulatory framework for the crypto industry.
Directly From Bitcoin ETF Issuers
You can buy a Bitcoin ETF from its issuer. You only need to register an account with the issuer on their website.
How to Purchase a Bitcoin ETF
Create a Brokerage Account
Download and install a brokerage app like Robinhood, then create and verify your account.
Fund Your Account
Brokerage firms support various deposit methods, such as debit/credit cards and bank transfers. You can use any of them to fund your account.
Research the Available Spot Bitcoin ETFs
Before buying an ETF, you need to do your due diligence. Consider factors like the costs involved in buying the ETF, the return on investment, and the credibility of the issuer.
Choose Your Ideal Bitcoin ETF
After researching the available Bitcoin ETFs, you can go ahead and select the one that aligns with your investment goals.
Place an Order
With your funded brokerage account, you can buy the selected Bitcoin ETF by simply placing an order. So, how do you place an order on a brokerage platform? Go to the buying page and enter the specific number of ETF shares you want to purchase. After that, you can place a stop, market, or limit order, depending on your investment strategy.
Keep an eye on Your Investment Regularly
After buying a Bitcoin ETF, it is advisable to monitor the investment regularly to respond to any market change in a timely manner.