Confused about the difference between a Bitcoin ETF and actual Bitcoin? In this video, I’ll explain the difference between investing in a Bitcoin ETF and investing in Bitcoin directly. I’ll share my top picks for the best Bitcoin ETFs with the lowest fees. Plus, find out which Bitcoin ETF is the best to invest in.
Andrei Jikh’s video: https://www.youtube.com/watch?v=fOJ9Z68lNlw
š Best Hardware Wallets:
š¾ Tangem: https://bit.ly/47RgLUf
š¾ Ledger: https://bit.ly/3NoRcPO
š Where you can Safely Buy Crypto:
š° Robinhood (Free 10 EUR): https://bit.ly/46IsO5y
š° Coinbase (Free 10$): http://bit.ly/3XmXKVc
š° OKX (bonus up to $2000 in crypto): https://bit.ly/3nhNj4G
š° Kraken: https://bit.ly/3I6YwPe
ā ļø Disclaimer: Iām not financial advisors. The content in this video is for educational purposes only and merely cite my own personal opinion. In order to make the best financial decision that suits your own needs, you must conduct your own research and seek the advice of a licensed financial advisor if necessary. Know that all investments involve some form of risk and there is no guarantee that you will be successful in making, saving, or investing money; nor is there any guarantee that you won’t experience any loss when investing. Always remember to make smart decisions and do your own research!
Have you ever wondered why do we even need an Bitcoin ETF what is a better investment an ETF or an actual Bitcoin and what will make more money in the long run I’ve been wondering about that as well so in this video we’ll dive into all approved Bitcoin ETFs and find out
Which one is better we’ll discuss all the differences between Bitcoin ETFs and Bitcoin itself and we’ll talk about the three main things you should consider before buying any of these ETFs so after watching this video you’ll know if it’s worth buying Bitcoin ETFs at all and if
So you’ll know which one to invest in cuz they are not the same but first let’s figure out what we are investing in I mean what is a Bitcoin ETF a Bitcoin spot ETF is an exchang traded fund that directly starts Bitcoin in a secure digital wall the purpose of this
Kind of ETF is to mirror as closely as possible the price of Bitcoin basically this is a regulated way that allows having exposure to bitcoin and profiting from Market volatility even for individuals like my grandm using regular brokerage accounts but which ETF is a better choice and is it worth buying ETF
At all if you can buy actual Bitcoins that’s a $20,000 question cuz that’s how much you can waste on ETFs if you choose the wrong one so here are the tickers of all approved Bitcoin ETFs each of them you can find in your brokerage account and technically they are absolutely the
Same but each exchange traded fund manages an undervine asset in our case Bitcoin and because the fund is essentially man your money each fund charges a small fee which is called an expense ratio any ETF on the market has this kind of fee and in Bitcoin ETFs it
Ranges from 0.2% to 1 and a half% per year and while at first glance the fee may seem very small in reality it grows like a snowball and overtime can cost you more than a brand new Tesla Model 3 let me explain let’s say you want to
Invest $10,000 in each of Bitcoin ETFs with the lowest and highest fees on the market to feel the difference this is the bitwise Bitcoin ETF ticker bitb and grayscale Bitcoin trust ticker gbtc let’s imagine that the average Bitcoin return will be around 35% annually and also that every month we will buy around
$100 of each of the ETFs that’s our investment plan based on this data in 10 years we will have around $263,000 on the balance sheet of our batb ETF it will gain almost $68,000 in profit but but during 10 years of holding it we will pay almost $1,400 in
Fees to the bitwise fund itself given that the funds commission will remain the same 0.2% for all that time and that sounds reasonable because on the balance sheet of our gbtc fund we will have only $240,000 we will make only $62,000 in profit and for 10 years we will pay
Almost $10,000 in commissions given the 1 and 12% expense ratio of gbtc the 1.3% % difference in expense ratio equals as much as $22,000 difference in our case simply because we picked the wrong ETF with a high expense ratio but don’t worry here’s a list of all ETFs with
Their fees and not all of them have such huge commissions but even the low expense ratio does not guarantee that you will earn more you see each of these funds tries to mirror the Bitcoin price movement as closely as possible and the keyword to that sentence is tries so
They all don’t track the exact one to1 volatility of Bitcoin and to illustrate how it actually works I will use some data from a recent video from Andrew jig about Bitcoin ETFs hope he won’t be mad at me so shout out Andre J and by the
Way I will leave the link to his video in the description below imagine you bought all Bitcoin ETFs on January 10 at the start of day trading for the same amount of money how much difference will there be between them just 10 days later so Android J run this exact experiment
To find out how well ETFs will perform relative to each other and what do you think the ETF with the lowest expense ratio ticker bitb from bit twise takes the honorable eighth place in the ETF ranking with a result of negative 8.43% it’s strange but despite having
The smallest fees among all the funds you don’t get the best performance this happens because while spot ETFs try to mirror the performance of Bitcoin very closely ETFs can have breaking errors in the price relative to the value of Bitcoin which will cause a difference in the performance of these two assets the
Reasons for this difference may be due to the small liquidity of the fund the weight rebalancing of the funds holding and management fees this tells us that in addition to the expense ratio we need to look at the things like the funds brand reputation and experience in
Crypto all of these factors affect ETF price by the way the worst performance in this experiment was obviously shown by the fund with the largest expense rate ratio ticker defi it is negative more than 15% and next just one spot above is black Rock’s IB ETF with a
Performance of -2 1 12% and a fee of 0.25% this shows us that in the short term the expense ratio is not the most important factor when choosing an ETF but what I know for sure that overtime funds with large fees should perform noticeably poorly in the middle of a
Rank we have all the other funds with fees between between 0.2% and 0.3% this is fbtc from Fidelity arcb from cywood brrrr from wer and so on the difference in the performance of these funds is less than a percent and they are not significantly different so when choosing
Between these funds I’d rather base my choice on the safety of the fund which I’ll cover in a minute and just so you don’t get bored the leader of the rating is invasa Galaxy Bitcoin ETF ticker btco with the result of – 7.38% and an expense ratio of 0.38% its performance significantly
Stands out from the rest of the funds while not having the lowest fees you might ask yourself all ETFs are in the negative why do we think- 7% is a good result but the thing to keep in mind here is that all these numbers include the fact that Bitcoin was in a downtrend
On this time frame so therefore the performance of all funds is in a negative and we don’t know yet how this same ETF will behave when Bitcoin goes up because they are still very young and there just isn’t enough data to predict the future perhaps the ones that fall
The most will grow the most or the opposite the ones that fall the least will grow the least but we don’t know yet what we do know for sure is that it is ideal for every fund to have a full correlation with the Bitcoin value now
Before we get to the last point which I personally find crucial when choosing between Bitcoin ETFs and Bitcoin let’s dive into SC areas where investing in Bitcoin ETFs can be really beneficial despite the difference in performance and the quite large fund fees what does buying an ETF give us compared to
Bitcoin first of all buying ETFs gives us regulatory oversight when you purchase your own Bitcoins you might be doing so without the backing of clear standardized regulations in simple words you might be scammed or your exchange might go bankrupt and so on with just Bitcoin in these cases you’re not
Protected in any way spot Bitcoin ETFs are subject to rules that ensure transparency and protect investors so if your brokerage account is insured by sapc the insurance should cover crypto ETFs as well for scenarios like if one of the funds you invested in collapses secondly convenience but I would say
It’s a benefit and a drawback at the same time when buying Bitcoin ETFs you’re excused for managing wallets with Bitcoins navigating online crypto exchanges and grappling with private and public Keys the good news is you won’t lose your Bitcoin the bad news is you’re trusting a large corporation with the
Storage of an asset that cannot be retrieved if it’s already stolen and that’s a very risky situation to be in and I’ll tell you why in just a minute cuz let’s cover the main benefit first the main benefit of Bitcoin ETFs for all individual investors will be in retirement accounts like IAS because
When buying Bitcoin inside an IRA account using pre- tax money you can gain more momentum and potential to grow your investment while covering those fun fees and tracking errors personally I think it’s kind of risky to invest your retirement money in Bitcoin but if you’re the kind of person who likes to
Gamble with your retirement money Bitcoin ETFs inside an IRA account are the way to go for investors who simply want to buy Bitcoin in a taxable account they might be better of buying the crypto directly from an exchange CU there are much lower commissions and for the last foll simple reason the amount
Of Bitcoins that each fund manages is counted in the billions of dollars making the funds A most desirable Target for hackers but unlike cash in a bank stolen Bitcoins can quickly be transferred anonymously to North Korea and are almost impossible to retrieve mix that with the fact that almost all
Bitcoin ETFs hold their assets with one company coinbase this looks like the perfect setup for a disaster or vice versa Fidelity stars all their Bitcoins by themselves but they don’t have as much experience in Self Storage of crypto as coinbase so my guess is they might be even more vulnerable to hacker
Attacks so which of these ETFs should you buy and should you that’s an individual decision for everyone but personally for maximum profit and safety I see only one solution here buying Bitcoin from The Exchange and storing it on a hardware wallet first off unless you have billions you’re not going to be
A target for huge hacking groups it doesn’t make sense for them to Target just your wallet personally secondly even a 40 bucks Hardware wallet will give you a similar level of security as the funds have and without paying Multi th000 Management fees you can click here
To watch my in depth review about this beginner friendly Hardware wallet with this little device you can safely store any crypto all without hassle with the SE phrase so click here and see you in the next video
2 Comments
Hi. Gread video!
Any news about the winners of the Ledger and Tangem giveaway?
What application do you use to edit and create the video? š