Bitcoin ETFs 101: What is Bitcoin ETF? Bitcoin vs Bitcoin ETFs

For cryptocurrency enthusiasts, perhaps you have heard about Bitcoin ETF or BITO. Recently the SEC has approved the first US-listed Bitcoin ETFs from issuers including BlackRock, Fidelity, Invesco, which led the price of Bitcoin to spike by more than US$1,000 soon after the announcement.


If you are also interested in investing in Bitcoin ETF, read on to find out what Bitcoin ETF is, what the differences between Bitcoin and Bitcoin ETF are, and what you should be aware of before investing a Bitcoin ETF.

masthead-media

What is Bitcoin ETF?

A Bitcoin ETF is a type of ETF that tracks the value of Bitcoin through a basket of assets such as spot markets, derivatives, or Bitcoin ownership instead of owning Bitcoin directly. Owners can gain exposure to Bitcoin without the accompanying expenses e.g. investing in wallet and the risk of owning them outright. It can also track Bitcoin derivatives in the form of futures contracts e.g. tracking prices of bitcoin futures contracts traded at the Chicago Mercantile Exchange (CME). 

Best Cryptocurrency Exchange

MoneySmart Exclusive
MoneySmart Exclusive

HashKey Exchange

Transaction fees
Up to 0.29%
Custody Fee
HK$0
Account Opening Min. Funding
HK$10,000

【MoneySmart x HashKey】
During the promotion period, successfully open an account through MoneySmart and complete identity verification (KYC). Within 7 days, deposit at least HK$60,000, and maintain a daily average asset balance of HK$60,000 for 30 consecutive days starting from the next day. You will then be eligible to receive additional rewards of HK$500 Apple Store Gift Card / HK$500 PARKnSHOP supermarket vouchers / HK$500 HKTVmall e-Vouchers!

Valid until 31 Dec 2024

Best US Stocks Online Brokerage 2024

MoneySmart Exclusive
🔥Highest offer in town
MoneySmart Exclusive
🔥Highest offer in town

Webull Securities Account

Dividend Collection Fee - US Stocks
0.2% of dividend amount (before tax), minimum 0.01
Minimum Commission - US Stocks
HK$0
Account Opening Min. Funding
HK$10,000

【Limited-time offer, best reward in TOWN🔥 !】
From now until 3 January 2025, new customers who successfully open an account through MoneySmart and submit reward claim can enjoy up to HK$4,288 exclusive rewards!
⠀⠀
【$80K Asset Reward 】: Upon successfully opening an account through MoneySmart, make first deposit of HK$80,000 maintain the funds for 60 days:
・PHILIPS RO Water Dispenser ADD6920WH/90 (value: HK$4,288)/ Insta360 X3 Standard Bundle  (value: HK$3,678) / SAMSUNG GALAXY Tab S9 FE (WIFI)  (6GB RAM + 128GB) - 10.9" (value: HK$3,588) / Sony WH-1000XM5 Wireless Noise Cancelling Headphones (value: HK$3,190) / HK$3,000 Apple Store Gift Card / HK$3,000 PARKnSHOP supermarket vouchers / HK$3,000 HKTVmall vouchers / HK$2,900 Deliveroo Cash Voucher + 12-month Deliveroo Plus Silver Membership Package (value: HK$3,626)
⠀⠀
Upon successfully opening an account through MoneySmart and making first deposit ≤HK$79,999 and maintain the funds for 60 days, can get up to HK$1,226:
・HK$600 PARKnSHOP supermarket vouchers /HK$500 Deliveroo Cash Voucher + 12-month Deliveroo Plus Silver Membership Package (value: HK$1,226)

Valid until 03 Jan 2025
Online Promo
Dividend Collection Fee - US Stocks
0 %
Minimum trading commission - USD
US$0.35
Account Opening Min. Funding
HK$10,000
Online Promo:

・Transparent and low rates; investors could choose between fixed rate commission pricing and tiered pricing
・US$0.0035 Min. Commission Fee US Stocks
・0.015% Min. Commission Fee HK Stocks
Valid until 31 Dec 2024
MoneySmart Exclusive
⏰Last chance to earn up to HK$3,258 rewards!
MoneySmart Exclusive
⏰Last chance to earn up to HK$3,258 rewards!

Valuable Capital Brokerage Account

Dividend Collection Fee - US Stocks
0%
Minimum Commission - US Stocks
US$0.99
Account Opening Min. Funding
HK$10,000

💰New account opening and transaction promotion in December! New customers can receive rewards of up to HK$3,267!
⠀⠀
New customers who successfully open account via MoneySmart with promo code「32BR」, fulfilling specific requirements and submit the reward claim can get rewards below (either 1) 
⠀⠀
 【Reward 1️⃣】Successfully open account and deposit ≥ HK$10,000 and retain for 60 days to get :

  • SONY WH-CH720N Headphone (Valued at HK$1,299) / Jollying Pebble 24" Foldable Suitcase (Valued at HK$1,499) / HK$1,000 Apple Store Gift Card / HK$1,000 PARKnSHOP Supermarket Vouchers / HK$1,000 HKTVmall e-Vouchers OR

【Reward 2️⃣】Deposit ≥ HK$40,000 and no withdrawal for 60 days to get :

  • ⁠Sennheiser Momentum True Wireless 4 (value: HK$2,499) / De'Longhi Dedica Style Series Pump-driven Espresso Coffee Machine(EC685) (value: HK$2,168) / HK$2,000 Apple Store Gift Card / HK$2,000 PARKnSHOP Supermarket Voucher / HK$2,000 HKTVmall e-Vouchers⠀⠀
    ⠀⠀

【Reward 3️⃣】
New customers who successfully open an account and complete any transaction (regardless of transaction type) by January 31, 2025, will receive an additional HK$50PARKnSHOP Supermarket Vouchers! (Each person can receive a maximum reward of HK$200)
⠀⠀
See below for more rewards.

Valid until 31 Dec 2024
MoneySmart Exclusive
One-Year 0 Commission for A Shares Market
MoneySmart Exclusive
One-Year 0 Commission for A Shares Market

Tiger Brokers

Min. Commission Fee US Stocks
US$0
Commission Fee HK Stocks
HK$0
Account Opening Min. Funding
HK$10,000

New customers who sign up and complete the specified account opening requirements using the invitation code 'MONEYSMART' through MoneySmart, first deposit of HK$10,000 or US$1,300 above and fill out the claim form can receive the following rewards!
⠀⠀
Exclusive rewards: JBL Wind 3 Portable FM Bluetooth Speaker (Value: HK$599) / HK$500 Apple Store Gift Card / HK$500 PARKnSHOP supermarket vouchers
⠀⠀
Year-end biggest rewards-earn up to HK$7,000* Rewards!
Extra reward: From now until January 31, 2025, by accumulating deposits of designated amounts, can earn up to HK$2,400 rewards. Retain the amount for 60 days, and can additionally earn up to HK$4,600 in rewards! A total of up to HK$7,000 in rewards!"
(How to Participate: Tiger Trade APP → Profile → Campaign, click on “Deposit now“ via the campaign page.)
*T&Cs apply.
⠀⠀
Get up to HK$2,300 welcome rewards!
*T&Cs apply.

Valid until 31 Jan 2025
MoneySmart Exclusive
Min. Commission Fee US Stocks
US$0
Commission Fee HK Stocks
HK$0
Account Opening Min. Funding
HK$10,000
🎉December limited offer
New customers who successfully open an account through MoneySmart during the promotional period and enter the invitation code "MS23" can enjoy cash rewards of up to HK$3,200💰
 
  • Open an account to receive a 30-day V3 membership, which includes commission-free trading for HK stocks, US stocks, and A-shares, along with no platform fees and no IPO handling fees (valued at HK$88).
  • Amazing low-interest offers: HK stock margin rates as low as 4.99% and A-share margin rates as low as 3.5%, with no limit on the amount (offer valid until December 31, 2024).


During the promotional period, if you deposit a cumulative total of HK$10,000 or more and maintain it until February 28, 2025, you will receive HK$800 cash. If you deposit a cumulative total of HK$80,000 or more and maintain it until February 28, 2025, you will receive an additional HK$2,400 cash, for a total of HK$3,200 cash! 💰 (Delivered by Huatai) 

📣Remember to ensure that your net deposit reaches HK$80,000 or more by December 31 to qualify for the full HK$3,200 cash reward! 💰
Valid until 31 Dec 2024

Ready to trade Bitcoin ETF?

Open your US stock brokerage account for trading Bitcoin ETF now!

Should I invest in Bitcoin or Bitcoin ETF?

Every investor has varying needs and expectations. A Bitcoin ETF does not represent BTC ownership but it still offers exposure to its value. If you do not prefer actively managing your investment, but at the same time you would like to diversify your investment portfolio, Bitcoin ETF suits you better than directly buying Bitcoin. 


Bitcoin ETF allows investors, especially beginners, to invest in Bitcoin without the need to go through the hassle of setting up a cryptocurrency exchange account while providing leverage to its value. If Bitcoin increases in price, so does the Bitcoin ETF, and vice versa.


Another consideration is that a Bitcoin ETF investor doesn’t need to take on the risks of owning Bitcoin directly. Bitcoin itself can be tricky to store and secure. For example, If a Bitcoin investor loses the password to the cryptocurrency wallet, their Bitcoin is lost forever. A Bitcoin ETF investor needs not to bear such risks. However, Bitcoin ETFs charge management fees for the convenience they provide.

Best Brokerage for buying Bitcoin ETF

BrokerageUS Stock Commission FeePlatform Fee
Charles SchwabUS$0US$0
WebullUS$0US$0
FutuUS$0.99US$0
Huatai InternationalUS$1US$0

Things You Need to Know Before Investing in Bitcoin ETF

Risks involved in investing Bitcoin ETF

If you think that investing in a Bitcoin ETF is free of risk, then you need to think again. There are still risks involved in investing in any investment products with no exception in Bitcoin ETF. Just because it is an ETF doesn't mean that it is necessarily safer or guarantee returns. Although it isn't a direct investment in Bitcoin, it is still risky due to the exposure to Bitcoin.

No actual Bitcoin ownership

Bitcoin ETFs attempt to track the performance of Bitcoin. You are not actually buying the underlying investment Bitcoin directly. While Bitcoin ETFs track the price of Bitcoin, they can also have multiple holdings in order to diversify the investment portfolio, suggesting that a rise in the price of Bitcoin may not be accurately reflected in the price of Bitcoin ETF.

Choosing a licensed exchange

Before finding the right online brokerage for investing Bitcoin ETF, you should always check that the online trading platform is licensed and registered by the Securities and Futures Commission. If the online broker is located outside of Hong Kong, you should check if they are licensed in jurisdictions.

background image

FAQ

Do I need a US stock account in order to invest in BITO?

Yes, you need to set up an investment account which trading US stocks is available.

Does Bitcoin ETF provide leverage to the price of Bitcoin?

Yes, if Bitcoin increases in price, so does the Bitcoin ETF, and vice versa. However, as Bitcoin ETFs have multiple holdings in order to diversify the portfolio, implying that a rise in the price of Bitcoin may not be proportional to that of Bitcoin ETF.

Is there any other ETF that tracks other cryptocurrency besides Bitcoin?

To date, most ETFs track Bitcoin and the popular ones are as follows:
  • Simplify U.S. Equity PLUS GBTC ETF (SPBC)
  • Valkyrie Bitcoin Strategy ETF (BTF)
  • VanEck Bitcoin Strategy ETF (XBTF)
  • Global X Blockchain & Bitcoin Strategy ETF (BITS)
  • Valkyrie Balance Sheet Opportunities ETF (VBB)