How and Where to Buy Spot Bitcoin ETFs in 2024 (2024)

SHORT ANSWER: You can buy spot Bitcoin ETFs on Robinhood, Coinbase Wallet, Webull and Interactive Brokers.

With new spot Bitcoin exchange-traded funds (ETFs), it has never been easier to get investment exposure to Bitcoin. The ETFs, which were approved by the Securities and Exchange Commission (SEC) in early 2024, have been the most successful ETF launch of all time, attracting huge amounts of attention and propelling Bitcoin to new highs. The ETFs can make it easier for investors to trade crypto and open up the space to a new demographic. Take a look at how you can buy shares of a spot Bitcoin ETF today.

What Are Spot Bitcoin ETFs?

An ETF is created when a sponsor pools together money from many investors and uses it to buy assets. These assets are then packaged into shares and given to the investors. They are useful tools for investors to gain exposure to markets, diversify their portfolios and find new trade ideas.

For Bitcoin ETFs, the sponsors, some of the largest asset managers in the world, bought Bitcoins and packaged them into shares that are sold to the public. This means that each share is correlated with a certain amount of Bitcoin stored on the blockchain and under the ownership of the sponsor.

Where to Buy Spot Bitcoin ETFs

Spot Bitcoin ETFs are available on most equity brokerages. However, Robinhood, Webull and Interactive Brokers are among the best platforms offering spot ETFs.

How to Buy Spot Bitcoin ETFs in 3 Steps

Bitcoin ETFs are purchased using a similar process to buying stocks or other ETFs. Here are the three steps you should follow to buy shares of a spot ETF.

1. Open an Account on a Brokerage

Most brokerages have made it easy to create an account. This can be done by providing an email and password. You will then have to provide some personal information to verify the account. This process usually takes around five to 10 minutes, and depending on the situation, accounts can be verified within one business day.

2. Fund the Account

With a verified account, you will need to fund. This can be done in several ways, such as a wire or automated clearing house (ACH) transfer. Wire transfers are directly between your bank and the broker and can be quick but often have higher fees. ACH transfers can be a bit slower but often do not have fees.

Additionally, some sites allow for instant access to buying power, such as Robinhood and Webull. This means that you can begin trading before the transfer is cleared and deducted from your bank account.

3. Make your Purchase

With a funded account, the next step is to choose an ETF and execute the trade. There are currently 11 different spot ETFs. While most are similar and track the price of Bitcoin closely, some things to consider when choosing an ETF are fees, liquidity, issuer reputation and market performance.

With an ETF selected, you can search for it on the broker's website. From there, you can select the “trade” button and enter the number of dollars or shares you would like to purchase. You can then execute the trade. You should receive a confirmation email and can view the ETF holding in your portfolio.

Pros of Investing in Bitcoin ETFs

• Convenience: The ETFs are extremely easy for investors to purchase. This allows them to get access to Bitcoin without the hassle of purchasing Bitcoin directly from a crypto brokerage.
• Liquidity: Though Bitcoin as a whole is very liquid, some exchanges have limited liquidity. ETFs solve this problem by bringing liquidity to a centralized place such as the Nasdaq Stock Market or BATS Global Markets. This means that the ETFs can have more consistent liquidity as opposed to Bitcoin on some smaller crypto exchanges.
• Diversification: Bitcoin has performed extremely well in 2024 and since its inception in 2009. Additionally, many view it as a store of value and a hedge against inflation. These characteristics could make it a good investment to add to a diversified portfolio.
• Professional custody: When you own Bitcoin yourself or on smaller crypto brokerages, there are some risks. For one, your tokens could be stolen through phishing scams.

Additionally, some crypto exchanges have been hacked in the past, and customer funds have been lost. The ETFs have professional custodians that make sure your funds are safe and are insured by the Securities Investor Protection Corp. (SIPC).

Cons of Investing in Bitcoin ETFs

• Management fees: The ETFs charge a small fee on investments, as there are costs associated with buying Bitcoin and distributing the associated shares. However, these fees are somewhat small compared to other ETFs. Additionally, some ETFs have special promotions where the first buyers can receive no fees.
• Limited control over Bitcoin: Bitcoin was created to promote peer-to-peer transactions. However, for Bitcoin to be used for this purpose, individuals have to hold Bitcoin directly. This is not possible with the ETFs, as the Bitcoin is technically held by the sponsor, who simply passes on the price movements to the investor.

Alternatives to Spot Bitcoin ETFs

• Invest in Bitcoin directly: Perhaps most obvious, if you want exposure to Bitcoin, you can buy it directly through a crypto brokerage.
• Futures ETFs: Another form of Bitcoin ETFs does not buy Bitcoin directly but instead uses futures to more loosely track the price of Bitcoin. However, these often have higher fees, as it is costly to continually manage and roll over futures contracts.
• Bitcoin mining stocks: There are a handful of companies that get most of their operational revenues from Bitcoin mining. The price of these companies is often correlated with the price of Bitcoin, as the two are closely related.

Now Is a Great Time to Buy Bitcoin with Ease

For much of its history, it was difficult to get your hands on Bitcoin. You either needed a specialized wallet or had to take a chance on a small crypto exchange. However, as the token has risen to prominence, it has become much easier to purchase Bitcoin. In 2024, it has never been easier to get your hands on it.

Frequently Asked Questions