Key insights
- The article compares two leading Bitcoin ETFs, iShares Bitcoin ETF (IBIT) and Fidelity Wise Origin Bitcoin ETF (FBTC). While both offer similar exposure and fees, IBIT is highlighted for its superior liquidity and tradability, making it preferable for traders seeking tighter spreads and quicker execution. FBTC has a structural advantage in self-custody of Bitcoin and is favored by retail buy-and-hold investors. The differences are minor, but IBIT's liquidity is seen as a slight long-term cost advantage.
Since first launching in early 2024, Bitcoin (BTC 3.46%) exchange-traded funds (ETFs) have become an $85 billion category led by the two largest funds in this space: the iShares Bitcoin ETF (IBIT 2.98%) and the Fidelity Wise Origin Bitcoin ETF (FBTC 2.96%).
Since both hold spot Bitcoin and charge identical 0.25% expense ratios, figuring out which one is better comes down to the small details.
The iShares Bitcoin ETF has more than $46 billion in assets and is the most liquid and tradable Bitcoin ETF in the market. On a daily basis, it trades about 7 times the dollar volume of the Fidelity fund. If you're looking for ultra-tight trading spreads and quick trade execution, the iShares Bitcoin ETF is the choice.
The Fidelity Wise Origin Bitcoin ETF has one structural advantage. It stores its own Bitcoin rather than outsourcing it to a third party (iShares uses Coinbase Prime for this). The fund also tends to be used more often by retail buy-and-hold investors than by traders, as evidenced by the much lower trading volume.
Overall, the differences between these two Bitcoin ETFs are minor, but I prefer the iShares Bitcoin ETF. The superior liquidity and tradability can give investors and traders a very slight cost advantage that can pay off in the longer term.