The cryptocurrency keeps attracting the interest of new and experienced investors. That’s because, despite its high volatility, there’s the potential to make substantial profits as a holder. One of the ways to enjoy these returns is by investing in Bitcoin Exchange Traded Funds.
This is a major cryptocurrency industry innovation that beginners in cryptocurrency investments should not miss. However, the process of getting started might seem challenging.
Let’s Recap: What Are Bitcoin ETFs?
Bitcoin ETFs are a type of exchange-traded fund that mostly deals in Bitcoin and other assets related to the first digital currency. They are investment vehicles that buy and sell shares to raise money. The money is then put into a diverse portfolio that follows an index, market area, or asset class (like cryptocurrency).
More Info: ETF Tracking Bitcoin Launches on Euronext Amsterdam Stock Exchange
You can buy and hold an ETF as an investment, just like you would a stock. ETFs are a quick and easy way to spread your portfolio because they usually invest in a group of stocks, bonds, etc. In this case, they invest in cryptocurrencies and companies that are working on making them, guarded by global regulatory trends.
Bitcoin ETFs don’t own any Bitcoin right now since its institutional adoption. They put their money into Bitcoin futures contracts or exchange-traded funds (ETFs) that are linked to companies.
Top Bitcoin ETF Applications
The Securities and Exchange Commision (SEC) has not yet approved any exchange-trade funds (ETFs). This is bound to change soon, as there are about ten current BTC spot ETF applications waiting to get the pass.
BlackRock
Here’s one of the top competitors, with more than $8.5 trillion in funds. Its ETF is the iShares Bitcoin Trust and New York City is its headquarters. In June 2023, BlackRock, the biggest asset manager in the world, put in an application for a spot in the BTC ETF. Major money managers sent the first of many spot Bitcoin ETF applications that would come in.
Read more: BlackRock’s ETF Carnival: A Bullish Breakdance as Bitcoin Shorties Take a $16M Two-Step Tumble
In their application, BlackRock suggested that Coinbase be used for both storage and market impact and prices. This move is what made their application stand out. It took into account the SEC’s worries about market manipulation, which was a problem with many past applications. Adding this feature, called a “surveillance-sharing arrangement,” has become normal for all spot Bitcoin ETF approval processes for applications since then.
Bitwise
Bitwise handles more than $1 billion in funds. Its ETF is Bitwise Bitcoin ETP Trust and its headquarters are in San Francisco, California. This company manages digital assets and helps buyers get into the bitcoin market. Matt Hougan started the business in 2017.
As of June 2023, Bitwise had filed for a spot Bitcoin ETF with the SEC. In the US, Bitwise already has a Bitcoin futures ETF that is live. In August 2023, the company also put in an application for a Bitcoin and Ether Market Cap Weight Strategy ETF. Unfortunately, the application was taken back shortly after, though.
Valkyrie
Valkyrie is a renowned digital asset investing business that gives clients access to bitcoin via conventional financial instruments. The company is notable for being one of the few on this list with an SEC-approved Bitcoin-related ETF (a Bitcoin Miners ETF).
The SEC green-lighted this ETF in 2022 because it is backed by Bitcoin mining firms that, on average, rely on 77% renewable energy. It presently has over a billion dollars in managed assets.
ARK Invest
This firm has a total of $14 billion in managed assets. Its Bitcoin ETF is ARK 21Shares and it is present in St. Petersburg, Florida. Ark Invest’s spot Bitcoin ETF is issued in conjunction with 21Shares AG, a Swiss ETF provider.
The company was the first to announce the fees that will be charged by its Bitcoin ETF to cover overhead costs. It’s only a minimal 0.95%. Furthermore, it has invested in cryptocurrency exchange Coinbase, the Grayscale Bitcoin Trust, and payment processor Square, giving it indirect exposure to Bitcoin.
Global X
When you’re talking about Global X, you’re referring to the big boys in the industry. At least, what else can you say about a firm with over $40 billion in investments being managed? Its ETF is the Global X Bitcoin Trust and it is located in New York City.
The ideas behind GlobalX are most like those behind Ethereum. The company is in charge of more than 110 exchange-traded funds (ETFs). A lot of them focus on emerging markets, commodities, new technologies, and stock income.
Mirae Asset Global Investments is the parent company of GlobalX and is based in Seoul. It oversees investments worth about $500 billion. Along with its spot Bitcoin ETF, GlobalX is working on a number of Bitcoin-related products, such as a Bitcoin futures ETF.
VanEck
This is one of the most popular names in the industry, with over $60 billion in assets under management. Its ETF is the VanEck Bitcoin Trust and like Global X, it has its headquarters in the Big Apple. When it came to applying for a spot in the Bitcoin ETF, VanEck was one of the first and most persistent players.
Similar to other ETF applications submitted around the same time, VanEck’s was turned down by the end of 2021. VanEck was not discouraged by the SEC’s rejection of their third application in 2022, and they submitted it again in early 2023. The company’s fourth application arrived in June 2023, following the norm established by BlackRock.
WisdomTree
There are over $85 billion in assets under management at WisdomTree. Its ETF is the WisdomTree Bitcoin Trust. WisdomTree is the only company on our list with a fully operational and certified spot Bitcoin ETF.
This Spot Bitcoin ETF is not based in the US; it debuted on the SIX stock market in Switzerland in 2019. The headquarters, though, are present in New York City. WisdomTree also attempted but failed in 2021 to seek a U.S. spot ETF license. However, after BlackRock’s statement in June 2023, it, like its competitors, quickly reapplied.
Invesco Galaxy
Meet Invesco Galaxy, with over $1.4 trillion in managed assets. The company and Galaxy Digital partnered to create an exchange-traded fund (ETF) focused on Bitcoin. This venture serves as an inspiration for other companies in the space to attempt similar offerings.
The Invesco Galaxy Bitcoin ETF was first filed with the SEC in 2021 and subsequently refused. Soon after Blackrock’s June 2023 announcement, the ETF was refiled.
Franklin Templeton
Franklin Templeton has over $1.4 trillion in assets under management. They were the latest manager with funds worth more than a quadrillion dollars to ask the SEC for a spot Bitcoin ETF. This company is also one of the oldest on our list; it has been around since the middle of the 1930s.
It’s move into the ETF industry shows the wider acceptance of Bitcoin in several sectors. Plus, the company works with investors of all types, from pension funds and foundations to private people. As such, it’s likely to receive approval.
Fidelity
Founded in 1946, this company has its home base in Boston, Massachusetts. It operates a brokerage firm and also deals with fund distribution. The company’s other services include providing investment advice, wealth management, and asset custody to individuals.
After BlackRock, Fidelity also put in an application for an exchange-traded fund that would keep real-time track of the price of Bitcoin. Fidelity wants to use Coinbase as a partner for tracking to stop people from manipulating the market.
Conclusion
As an asset class, cryptocurrencies are still very new, and exchange-traded funds (ETFs) are even newer. Soon, there will be a lot of ups and downs with cryptocurrencies and the companies that are working on making them.
You might find the safety and regulatory landscape you need in long-term exchange-traded funds (ETFs) that invest in stocks or real estate. So hesitate no more and get your investment running!
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