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A Guide to Bitcoin ETFs

By Inyoung Hwang · January 19, 2024 · 8 minute read

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A Guide to Bitcoin ETFs

What Is a Bitcoin ETF?

Bitcoin ETFs are exchange-traded funds that allow investors to gain exposure to Bitcoin without directly owning it. These ETFs include spot Bitcoin ETFs, which are designed to track the price of Bitcoin. That means when the price of Bitcoin in U.S. dollars goes up, a spot Bitcoin ETF trading on the stock exchange should also go up, and vice versa.

Spot Bitcoin ETFs were first approved by regulators in the United States in January 2024, a significant step as it opened more doors for everyday investors interested in trading crypto on a public stock exchange.

Bitcoin ETFs have a much narrower focus than most other exchange-traded funds, which started out with the aim of giving investors broad exposure to the stock market. But, like all investments, they have benefits and risks that investors should know about.

An Introduction to Bitcoin ETFs

Bitcoin ETFs are exchange-traded funds that, effectively, allow investors to gain exposure to the crypto markets as easily as they would buy or sell a stock. Bitcoin ETFs track the price or value of Bitcoin, and so the value of a Bitcoin ETF share is designed to rise or fall in relation to the change in value of the underlying cryptocurrency.

It also means that investors don’t need to directly own cryptocurrency to gain exposure to the market in their portfolio — they can invest in a security that tracks it instead. Another added benefit is the investors may sometimes be able to avoid crypto fees that some platforms and brokerages could charge for crypto transactions.

The Securities and Exchange Commission, one of the top regulation bodies in relation to the financial industry in the United States, first approved U.S.-listed Bitcoin ETFs in January 2024.

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What Are Spot Bitcoin ETFs?

Spot Bitcoin ETFs are ETFs that trade at “spot” value – “spot” value meaning the price of the underlying asset at any given time. So, if a buyer and seller come together to make a trade, they would do so at the spot price. There are spot markets for all sorts of commodities.

Where Can Investors Buy Spot Bitcoin ETF Shares?

Investors can buy spot Bitcoin ETF shares via numerous exchanges and platforms. While previously, investors interested in Bitcoin or other cryptocurrencies would need to trade on platforms that supported cryptocurrencies, since Bitcoin ETFs are, well, ETFs, investors are likely to find them available on many other platforms — that includes SoFi, which allows investors to buy spot Bitcoin ETF shares as well.

Are There Other Spot Crypto ETFs?

Spot Bitcoin ETFs track the price of a fund’s Bitcoin holdings, and other spot crypto ETFs, if and when they are approved and hit exchanges, will do the same.

As noted, spot Bitcoin ETFs were first approved by regulators in early 2024. There are ETFs that track Bitcoin-exposed or Bitcoin-adjacent companies, too, as well as Bitcoin futures. Spot Ethereum ETFs, which may be the next type to be greenlit by regulators, are similar to spot Bitcoin ETFs, in that they track the price of Ethereum, and allow investors to gain exposure to Ethereum in their portfolios without owning it directly.

What Are Bitcoin Futures ETFs?

Bitcoin futures ETFs are another type of ETF that give investors exposure to the price movements of Bitcoin via futures contracts. Futures are a type of contract that dictates the terms of a trade at a future date, and typically have underlying assets such as precious metals or other commodities — including crypto.

Accordingly, Bitcoin futures ETFs are crypto futures ETFs that specifically track Bitcoin futures contracts. The SEC actually approved Bitcoin futures contracts in 2021, but again, investors should know that they don’t track the price or value of the underlying asset exactly — which differentiates them from spot Bitcoin ETFs.

Are There U.S.-listed Spot Bitcoin ETFs?

There are U.S.-listed spot Bitcoin ETFs. When the SEC first granted their approval in January 2024, it opened the door to several Bitcoin ETFs hitting the market. As a result, investors were able to start buying and selling them via the stock market.

The SEC’s approval led to new spot Bitcoin ETFs being listed on a few different exchanges. Here’s a list of the first 11 spot Bitcoin ETFs that gained approval from the SEC:

•   Grayscale Bitcoin Trust (GBTC)

•   Bitwise Bitcoin ETF (BITB)

•   Hashdex Bitcoin ETF (DEFI)

•   ARK 21Shares Bitcoin ETF (ARKB)

•   Invesco Galaxy Bitcoin ETF (BTCO)

•   VanEck Bitcoin Trust (HODL)

•   WisdomTree Bitcoin Fund (BTCW)

•   Fidelity Wise Origin Bitcoin Fund (FBTC)

•   Franklin Bitcoin ETF (EZBC)

•   iShares Bitcoin Trust (IBIT)

•   Valkyrie Bitcoin Fund (BRRR)

Note, too, that it’s anticipated that additional spot cryptocurrency ETFs will become available.

How Are Bitcoin ETFs Regulated?

Bitcoin ETFs are and will be regulated by the SEC, which sets out guidance in terms of legality. Regulation in the crypto space is and has been murky — it’s been largely unregulated for the entirety of the crypto space’s existence. But the advent of crypto ETFs is likely to change that to some degree, as spot Bitcoin ETFs’ underlying asset is and can be Bitcoin itself, rather than Bitcoin derivatives.

That’s another important distinction investors should note: Spot and futures Bitcoin ETFs may be regulated under slightly different terms, as futures are derivatives. Investors should pay attention to the space and to any SEC guidance released regarding crypto regulation, as it may impact the value of their holdings in crypto ETFs, too.

Pros & Cons of Bitcoin ETFs

Like all investments, there are pros and cons of ETFs — including Bitcoin ETFs.

Benefits of Bitcoin ETFs

Proponents of Bitcoin ETFs appreciate that they can give investors exposure to the complicated and volatile cryptocurrency market, without the need to personally hold actual crypto.

Convenience and Ease

Buying a spot Bitcoin ETF requires little tech know-how beyond knowing how to use a computer, open a brokerage account, and place a buy order.

ETFs provide a seemingly easy way to profit from rising asset prices without having to actually own those assets. On the other hand, holding actual Bitcoin may require a somewhat advanced level of technical expertise.

Safe Storage

Some cryptocurrency exchanges might be trustworthy, but some users have also had a controversial history of being hacked, stolen from, or defrauded. Even reliable exchanges open investors up to risk. Owning shares of a Bitcoin ETF can help avoid those risks.

Securely storing cryptocurrencies — for example, storing the private keys to a Bitcoin wallet — is most often done by using either a paper wallet that has the keys written in the form of a QR code and a long string of random characters, or by using an external piece of hardware called a hardware wallet.

Lower Counterparty Risk

Counterparty risk arises whenever a third party holds onto something for someone else. In certain situations, the third party’s interests might run contrary to that of the investor’s assets that they hold. Over the years, some service providers have sprung up promising to securely hold crypto for users. This may or may not be a desirable or promising solution, but even if it were suitable in all cases, there would still be risk.

At best, an unforeseen event like a bankruptcy or market disruption could cause a business to withhold customer funds for a period of time, making them inaccessible when people might need those assets most. Owning shares of a Bitcoin ETF, however, provides a level of protection, as those shares are regulated and in an investor’s portfolio.

Risks of Bitcoin ETFs

There are, naturally, numerous risks for investors to consider with Bitcoin ETFs, including volatility, costs, and the unpredictable and still largely-unregulated nature of the crypto market.


The volatility comes from the occasional wild swings experienced in the price of Bitcoin against most other currencies. A Bitcoin ETF, which is intended to mimic the price action of Bitcoin, should also experience similar price swings. This could scare investors that have a lower risk tolerance, enticing them to panic sell.


One of the risks that comes from holding an ETF of any kind involves its expense ratio. This number refers to the amount of money a fund’s management charges in exchange for providing the opportunity for investors to invest in their fund.

If a fund comes with an expense ratio of 2%, for example, the fund management would take $2 out of a $100 investment each year. This figure is usually calculated after profits have been factored in, cutting into investors’ gains. In other words, some Bitcoin ETFs could be relatively expensive for investors to hold, but it’ll depend on the specific fund.

Fraud and Market Manipulation

Regulators have cited fraud and market manipulation as reasons for why they were cautious about approving a spot market Bitcoin ETF. It’s unclear how the SEC’s approval of spot Bitcoin ETFs may affect fraud and market manipulation in the crypto space, but it’s something inventors should be aware of.

The Takeaway

Spot Bitcoin ETFs were approved by the SEC in early 2024, and as a result, it’s likely that many more crypto ETFs will also hit markets and exchanges in the future — though nothing is guaranteed. These ETFs function more or less like any other type of ETF, and investors can use them to gain exposure to the crypto markets.

For investors curious about the cryptocurrency market but not yet ready to take the plunge, a Bitcoin ETF may represent a more convenient, comfortable option. It may be best to speak with a financial professional before investing, too.

If you’re ready to bring crypto into your portfolio, you can invest in a Bitcoin ETF with SoFi. Along with many other types of investments, SoFi’s platform offers investors access to the crypto space through spot Bitcoin ETFs.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

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What are the options for Bitcoin ETFs?

There are Bitcoin futures ETFs, and spot Bitcoin ETFs listed in the U.S., which investors can buy. Given the SEC’s approval of Bitcoin ETFs in early 2024, there may soon be additional spot crypto ETFs available to investors in the future.

Are there U.S.-listed Bitcoin ETFs?

As of January 2024, there are U.S.-listed spot Bitcoin ETFs after the SEC approved an initial batch of them, and it’s likely there will be more in the subsequent months and years.

Where can Bitcoin ETF shares be purchased?

Crypto ETFs can be purchased and traded on the stock market, alongside other ETFs.

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Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by email customer service at [email protected]. Please read the prospectus carefully prior to investing.
Shares of ETFs must be bought and sold at market price, which can vary significantly from the Fund’s net asset value (NAV). Investment returns are subject to market volatility and shares may be worth more or less their original value when redeemed. The diversification of an ETF will not protect against loss. An ETF may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.

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If you invest in Exchange Traded Funds (ETFs) through SoFi Invest (either by buying them yourself or via investing in SoFi Invest’s automated investments, formerly SoFi Wealth), these funds will have their own management fees. These fees are not paid directly by you, but rather by the fund itself. these fees do reduce the fund’s returns. Check out each fund’s prospectus for details. SoFi Invest does not receive sales commissions, 12b-1 fees, or other fees from ETFs for investing such funds on behalf of advisory clients, though if SoFi Invest creates its own funds, it could earn management fees there.
SoFi Invest may waive all, or part of any of these fees, permanently or for a period of time, at its sole discretion for any reason. Fees are subject to change at any time. The current fee schedule will always be available in your Account Documents section of SoFi Invest.

Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


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