Bitcoin ETFs Explained | Complete Guide For Beginner’s In 2024

Bitcoin ETFs Explained | Complete Guide For Beginner’s In 2024

Bitcoin has been making headlines all
year from the Bitcoin ETF approval
pushing the price to new heights to the
block reward having event that just
happened well this is going to be the
ultimate guide to bitcoin ETFs for
complete beginners we’ll be covering
what an ETF actually is what are the
most popular Bitcoin ETFs and how this
method of purchasing Bitcoin differs
from the other methods out there and
feel free to skip ahead at any point in
time using the table of contents in the
description below let’s Dive Right In
before we get into the Bitcoin ETFs it’s
important to understand what an ETF
actually is ETF stands for exchange
traded fund and this is a basket of
Securities that is designed to replicate
an underlying index as closely as
possible for example vo the Vanguard S&P
500 ETF is one of the most popular out
there and this ETF tracks the s&p500
which is an index of the 500 largest
publicly traded us companies the ETFs
trade on the stock exchanges just like
individual stocks and this makes it a
lot easier to buy and sell shares of
them compared to a traditional Index
Fund or mutual fund ETFs are used as a
means of gaining exposure to a
particular industry with ease or in some
cases they’re also used as a method of
having a diversified investment within
one particular asset that you own
however Bitcoin ETFs are a little bit
different than your run-of-the-mill ETFs
because instead of owning a portfolio of
different Securities you own just one
asset and that is Bitcoin Bitcoin ETFs
are not providing you with
diversification because the only asset
owned is Bitcoin instead what they’re
providing you with is ease of exposure
to bitcoin through the traditional
Financial system before these Bitcoin
ETFs came out if you wanted exposure to
bitcoin you would have to buy it through
an exchange and then store it on a
wallet if you wanted to have custody of
it and all of these have their own risk
factors self- custody of cryptocurrency
through your own wallet comes with the
risks of theft loss of access and more
making this a less than perfect option
for many in addition crypto exchanges do
not have sipc insurance like a
traditional brokerage account does some
exchanges out there like coinbase have
their own crime insurance policy that
covers a portion of the crypto held in
their storage systems however this is
not the same as sipc protection through
these Bitcoin ETFs by investing in them
through a brokerage firm investors have
sipc protection which covers investors
against the loss of Securities including
ETFs in the event that their brokerage
firm fails sipc protects the Securities
and cash held within your brokerage
account up to
$500,000 and up to 250,000 of that limit
can be used to cover cash in your
brokerage account you can check the list
of sipc members yourself on their
website it but for the most part all
reputable brokerage firms in the United
States are members now it’s important to
understand that sipc protection does not
cover you against investment losses that
may be experienced when you purchase a
asset and the value of that asset
declines but nonetheless this is a big
reason why the Bitcoin ETFs are so
popular you can invest through your
traditional brokerage platform and have
the Peace of Mind of sipc protection now
within the realm of Bitcoin ETFs there
are a few different types and it’s
important to understand the differences
between them Bitcoin spot ETFs aim to
provide investors with exposure to the
current market price of Bitcoin they own
actual Bitcoin and the primary goal of
these funds is to track and replicate
the price of Bitcoin over time Bitcoin
Futures ETFs do not own actual Bitcoin
instead they own Bitcoin Futures
contracts and these are used as a means
of speculating on the future price of
Bitcoin some of these Bitcoin f futes
ETFs are designed to give you leveraged
exposure which means the gains and
losses would be magnified or you will
also find inverse ETFs that are going to
be designed to do the opposite of
whatever the price of Bitcoin is doing
currently not only are these a
derivative product that doesn’t own
actual Bitcoin they also have costs
associated with the Bitcoin Futures
contracts that are held and these get
rolled over on a day-to-day basis and
this can cause the value of the fund to
Decay over time for the most part
investors looking to own shares of a
Bitcoin ETF as a long-term investment
would want to be looking into these
Bitcoin spot ETFs but it’s important to
be familiar with both as both types have
now been fully approved by the SEC since
January of 2024 now it’s no coincidence
that after the Bitcoin spot ETF approval
we saw the price of Bitcoin sore that’s
because this new means of exposure to
bitcoin brought tens of billions of
dollars of new investment Capital into
Bitcoin according to the block Bitcoin
ETFs saw $4.6 billion in trading volume
on the very first day that they traded
and in the first 7 days that total grew
to over $20 billion as of April 18th the
most popular Bitcoin ETF which is the
grayscale Bitcoin trust had a total in
assets under management of 21 billion
the other top four most popular Bitcoin
ETFs had a combined total of roughly
33.3 billion in assets under management
in a nutshell these Bitcoin ETFs
Unleashed massive pent up demand for
Bitcoin and that demand drove the price
higher because as we know Bitcoin has a
finite and dwindling Supply and now that
we’ve had another scheduled block reward
having event the new supply of Bitcoin
coming to the market from miners has
been reduced by a further 50% we’re
going to get right into a breakdown of
the top five most popular Bitcoin ETFs
after this but first a word from our
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investing through a Bitcoin ETF first of
all Bitcoin ETFs are tied to the stock
market meaning that you can only trade
them during Market hours meanwhile the
price of Bitcoin is changing
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addition Bitcoin ETF ownership is not
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let’s dive into the top five most
popular Bitcoin ETFs for a full
comparison as I’m sure you can imagine
imagine these Bitcoin ETFs are all very
similar the main differentiator between
them since they all Own 100% allocation
of Bitcoin is going to be the fees
associated with them as well as any fee
waivers that might be in place as an
incentive gbtc which is the grayscale
Bitcoin trust ETF is the most popular
Bitcoin ETF they were also the first
ones to offer a Bitcoin trust investment
and then since the ETF approval they
converted this into a Bitcoin spot ETF
they own an astounding
38,5 N3 Bitcoin and this amount changes
based on their total assets under
management but when it comes down to the
fees this fund has the highest expense
ratio by far out of the top five most
popular options coming in at an expense
ratio of
1.5% ibit or the ishares Bitcoin trust
is the second most popular Bitcoin ETF
and as of April 17th this fund owns
272,000 in assets under management
whereas that fee would be reduced to
0.12% for the first year but since then
this fund has now reached more than
three times that in total assets next up
we have the third most popular Bitcoin
ETF which is fbt C the Fidelity wise
origin Bitcoin fund and this ETF still
has a fee waiver in place Fidelity is
waving the
.25% expense ratio associated with this
fund through the end of July for
everyone meaning that the fee is going
to kick in on August 1st of 2024 the
fourth most popular Bitcoin ETF is arcb
the arc 21 shares Bitcoin ETF now this
ETF has an expense ratio of 0 to 1%
which is slightly less than Fidelity and
ey shares and a lot less than grayscales
1.5% and finally the fifth most popular
Bitcoin ETF is bitb the bitwise Bitcoin
ETF now this ETF has an annual expense
ratio of wait for it
0.2% so it’s just slightly less than the
others out there but it might be a
differentiating factor for those who are
very sensitive to fees now they also had
a fee waiver that was in place for the
first 6 months whereas the first $1
billion that was invested into the fund
did not incur the fee but since then
they have reached more than double this
in total assets under management one
final detail that’s important to note
here is that Bitcoin ETFs can trade at a
slight premium or discount when compared
to the market value of the Bitcoin that
they actually own the total assets under
management for these funds changes all
of the time and this requires them to
make changes to their Bitcoin
allocations this results in a difference
between the total assets held in the
fund and the total value of the Bitcoin
that the fund owns when the assets under
management are higher than the total
value of the Holdings of the Bitcoin the
fund is trading at a premium on the
other hand when the total value of the
Holdings exceeds the total value of the
assets under management the fund is
trading at a discount if you search for
the ticker symbol of a particular fund
followed by NA which stands for net
asset value this will give you more
information on that discount or premium
that the fund is trading at for example
here is the bitwise Bitcoin ETF discount
or premium over time and it’s normally a
very slight difference the arc 21 shares
Bitcoin ETF shared information about
this on their ETF page so for example
looking at this their greatest premium
in quarter 2 has been 86% and the
greatest discount so far in quarter 2
has been. 54% if you’re really getting
into the nitty-gritty of these Bitcoin
ETFs you might want to check how this
discount or premium changes over time
with a fund that you might be
considering there you have it guys
that’s a crash course on bitcoin ETFs
for beginners if you made it to the very
end please drop a like on this video as
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future notifications let us know in the
comments down below if you own shares of
any of these Bitcoin ETFs or if you have
any thoughts or opinions on them and
while you’re down there don’t forget to
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I’ll see you there

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Here’s the ultimate guide to Bitcoin ETFs for complete beginners. We’ll be covering what an ETF is, what are the most popular Bitcoin ETFs, how this method of purchasing Bitcoin differs from others and more.

00:00:00 Introduction
00:00:34 What Is An ETF?
00:01:48 Bitcoin ETF vs Direct Ownership
00:03:27 Types Of Bitcoin ETFs
00:07:25 Top 5 Bitcoin ETFs
00:10:10 Discount vs Premium Explained

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