Bitcoin is the best-known cryptocurrency, and the arrival of Bitcoin ETFs has created excitement across the financial landscape. As the buzz around Bitcoin grows, it is important to understand the difference between owning Bitcoin directly and investing in a Bitcoin ETF.
This article breaks down both options using the information provided. It looks at access, ownership, trading hours, fees, and the role of Bitcoin ETFs in wider adoption.
Why Real Bitcoin Appeals to Many Investors
Real Bitcoin offers 24/7 access, 365 days of the year. This keeps investors constantly connected to the Bitcoin market and allows them to seize opportunities day or night, including weekends and holidays, by buying and selling in real time.
Another major feature of real Bitcoin is complete ownership. With complete ownership, investors have total control of their Bitcoin. There is no need for a middleman such as a fund manager or financial adviser. With real Bitcoin, the investor is in the driver’s seat and can act on Bitcoin opportunities on their own time.
What a Bitcoin ETF Is
In January 2024, Bitcoin ETFs were approved by the SEC to be traded on the stock market. A Bitcoin ETF is not actual Bitcoin. Instead, Bitcoin ETFs are funds managed by financial institutions that purchase Bitcoin for their fund, and investors can invest in that fund.
With the approval of Bitcoin ETFs, Bitcoin has gained wider adoption and has been propelled further into the mainstream. As major financial institutions invest in significant amounts of real Bitcoin for their funds, the available supply shrinks, boosting demand and making Bitcoin even more desirable.
Key Differences Between Real Bitcoin and Bitcoin ETFs
1. Ownership
Owning real Bitcoin means complete ownership and total control. Investing in a Bitcoin ETF means indirect ownership of Bitcoin. While an ETF offers exposure to the market, the investor does not actually own the underlying asset.
2. Access and Trading Hours
Real Bitcoin operates 24 hours per day and is available 365 days per year. Bitcoin ETFs, however, are traded on the New York Stock Exchange, which limits trading to stock market hours.
- The traditional stock exchange operates 6 and 1/2 hours per day.
- The stock exchange is closed on weekends and holidays.
- This leaves investors with only 251 days of access per year for Bitcoin ETFs.
- Real Bitcoin is available 365 days per year.
According to the provided figures:
- Bitcoin ETF access: 1,631 1/2 total hours per year
- Real Bitcoin access: 8,760 total hours per year
Based on these numbers, Bitcoin ETFs offer 80% less access to market movements compared to owning real Bitcoin, which provides uninterrupted access every hour of every day.
3. Fees
Bitcoin ETFs may involve higher fees. Four types of fees were listed:
- Expense ratio fee
- Total annual fund operation expenses fee
- Bid ask spread fee
- Custodian fee
Stock market management fees could be as high as 1.5% annually, which could reduce potential profits.
Advantages Mentioned for Bitcoin ETFs
Bitcoin ETFs have helped Bitcoin gain wider adoption and move further into the mainstream. Major financial institutions buying significant amounts of real Bitcoin for their funds can shrink available supply, boost demand, and make Bitcoin more desirable.
Important Trade-Offs
The choice between buying real Bitcoin and investing in a Bitcoin ETF comes down to individual preferences for control and accessibility. Real Bitcoin offers direct ownership, total control, and full-time market access. Bitcoin ETFs offer market exposure through a fund structure traded on the stock market, but with limited hours, indirect ownership, and possible fees.
Each option warrants careful consideration before diving in.
Real Bitcoin Through iTrust Capital
For those interested in investing in real Bitcoin, iTrust Capital provides the opportunity to buy and sell 24/7 with the tax benefits of an IRA. This combines the growth potential of Bitcoin with an opportunity to maximize profits.
To discover the simplicity of directly owning real Bitcoin, the material directs readers to visit itrustcapital.com.
FAQ
What is the main difference between real Bitcoin and a Bitcoin ETF?
Real Bitcoin gives the investor complete ownership and total control. A Bitcoin ETF is a fund managed by a financial institution, so the investor has indirect ownership and does not own the underlying asset.
Are Bitcoin ETFs actual Bitcoin?
No. The material states that a Bitcoin ETF is not actual Bitcoin. It is a fund that purchases Bitcoin, and investors invest in that fund.
How do trading hours differ?
Real Bitcoin is available 24/7, 365 days a year. Bitcoin ETFs are traded on the New York Stock Exchange, which operates 6 and 1/2 hours per day and is closed on weekends and holidays.
How much yearly access does each option provide?
The provided figures say Bitcoin ETFs offer 1,631 1/2 total hours per year, while real Bitcoin offers 8,760 total hours per year.
What fees are associated with Bitcoin ETFs?
The material lists four types of fees: expense ratio fee, total annual fund operation expenses fee, bid ask spread fee, and custodian fee.
Why have Bitcoin ETFs increased attention on Bitcoin?
The approval of Bitcoin ETFs has helped Bitcoin gain wider adoption and move further into the mainstream. The material also says that major financial institutions buying significant amounts of real Bitcoin for their funds can reduce available supply and boost demand.
Content Source
An Indian crypto journalist covering the developments in the Bitcoin and blockchain industries. Her work helps readers understand key changes in the world of digital assets.
