ETF / Indirect Exposure — How It Works & Best Providers
Bitcoin ETFs allow investors to gain exposure to Bitcoin's price movements through traditional brokerage accounts. The ETF issuer purchases and custodies actual Bitcoin, while investors hold shares of the fund. This eliminates the need for crypto wallets, private keys, or direct custody concerns. Ideal for retirement accounts (IRAs, 401ks) and traditional investors who want Bitcoin allocation within existing portfolios.
Trade-offs
Pros & Cons
+Pros
- ✓No crypto wallet or key management needed
- ✓Available in retirement accounts
- ✓SEC regulated
- ✓Maximum regulatory clarity
- ✓Familiar brokerage interface
−Cons
- ✗No direct Bitcoin ownership
- ✗Cannot withdraw actual Bitcoin
- ✗Annual expense ratio reduces returns
- ✗Tracking error possible
- ✗Dependent on ETF issuer and custodian
Ideal Users
Best For
Rankings
Best ETF / Indirect Exposure Providers
Ranked by weighted Custody Score across 8 criteria.
Fidelity Wise Origin Bitcoin Fund (FBTC) is unique because Fidelity self-custodies the underlying Bitcoin through Fidelity Digital Assets. Eliminates dependence on third-party custodians. Second-largest Bitcoin ETF by AUM.
Read full review →iShares Bitcoin Trust (IBIT) by BlackRock is the largest Bitcoin ETF by AUM. Over $50B in assets within its first year. Custodied by Coinbase Custody. Offers regulated Bitcoin exposure through standard brokerage accounts.
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