Which Bitcoin ETFs Have Been Approved and When

The Bitcoin ETFs Approved in the United States

The U.S. Securities and Exchange Commission (SEC) has approved several Bitcoin exchange-traded funds. The first spot Bitcoin ETF — one that holds actual Bitcoin rather than futures contracts — was approved on January 10, 2024. Multiple funds received approval on the same day and in the weeks that followed.

The funds approved include the iShares Bitcoin Trust (ticker: IBIT), the Fidelity Wise Origin Bitcoin Mini Trust (ticker: FBTC), the Grayscale Bitcoin Mini Trust (ticker: BTC), the Invesco Bitcoin Trust (ticker: BTCO), the Valkyrie Bitcoin Fund (ticker: BRRR), and the WisdomTree Bitcoin Fund (ticker: BTCW). Each trades on a major U.S. stock exchange and can be bought through a standard brokerage account.

Before January 2024, Bitcoin futures ETFs had been available since 2021, but these track the price of Bitcoin futures contracts traded on the Chicago Mercantile Exchange rather than Bitcoin itself. The approval of spot Bitcoin ETFs marked a significant shift in how retail investors could gain exposure to Bitcoin through a traditional investment vehicle.

Key Takeaways

The SEC approved the first spot Bitcoin ETFs on January 10, 2024, allowing investors to own Bitcoin through a standard brokerage account without managing a digital wallet.
Multiple Bitcoin ETFs were approved simultaneously, including funds from iShares, Fidelity, Grayscale, Invesco, Valkyrie, and WisdomTree, each with different fee structures and fund sizes.
Spot Bitcoin ETFs hold actual Bitcoin, unlike Bitcoin futures ETFs approved in 2021, which track Bitcoin futures contracts instead.
Bitcoin ETFs trade during regular stock market hours on major U.S. exchanges, making them accessible through any brokerage that offers stock trading.

How Spot Bitcoin ETFs Differ from Futures ETFs

A spot Bitcoin ETF holds actual Bitcoin in a vault or custodial account. When you own shares of a spot Bitcoin ETF, the fund owns the underlying Bitcoin on your behalf. The fund's value tracks the current market price of Bitcoin directly.

A Bitcoin futures ETF, by contrast, holds contracts that bet on the future price of Bitcoin rather than Bitcoin itself. These contracts are traded on the Chicago Mercantile Exchange and expire on set dates. The fund must continuously buy new contracts as old ones expire, which can create tracking differences between the fund's performance and Bitcoin's actual price movement.

For most investors, spot Bitcoin ETFs are simpler because they move in line with Bitcoin's price without the complexity of rolling futures contracts. However, spot Bitcoin ETFs charge annual fees (typically between 0.2% and 0.25%) to cover the cost of storing and insuring the Bitcoin they hold.

Fee Structures and Fund Sizes

Bitcoin ETF fees vary by fund. The iShares Bitcoin Trust charges 0.19% annually, while the Fidelity Wise Origin Bitcoin Mini Trust charges 0.25%. The Grayscale Bitcoin Mini Trust charges 0.20%. These percentages are deducted from your investment each year, so a smaller fee difference compounds over time.

Fund size matters because larger funds typically have more stable pricing and tighter bid-ask spreads (the difference between what buyers will pay and what sellers will ask). As of early 2024, the iShares Bitcoin Trust and Fidelity Bitcoin Mini Trust were among the largest by assets under management, though fund sizes change as money flows in and out.

Before choosing a Bitcoin ETF, compare the annual fee against the fund's size and trading volume. A fund with slightly higher fees but much larger assets may offer better execution when you buy or sell shares.

How to Buy Bitcoin ETFs Through Your Brokerage

Bitcoin ETFs trade like any other stock or ETF. You can buy them through any brokerage that offers stock trading — this includes traditional brokers like Fidelity, Charles Schwab, and E-Trade, as well as commission-free platforms like Robinhood and Webull.

To buy a Bitcoin ETF, log into your brokerage account, search for the fund's ticker symbol (such as IBIT or FBTC), and place a buy order just as you would for any stock. You can buy fractional shares on most platforms, so you do not need to buy a whole share. The transaction settles in the standard two business days.

Bitcoin ETFs can be held in any account type your brokerage offers — a taxable account, an IRA, a 401(k) if your plan allows it, or a custodial account for a minor. This flexibility is one reason spot Bitcoin ETFs became popular quickly after approval.

Tax Treatment of Bitcoin ETF Gains

Bitcoin ETF shares are taxed like stocks. If you hold the shares for more than one year before selling, any gain is taxed as a long-term capital gain, which typically has lower tax rates than short-term gains. If you sell within one year, the gain is taxed as a short-term capital gain at your ordinary income tax rate.

Dividends are not typically paid by Bitcoin ETFs because Bitcoin itself does not generate income. However, if a fund sells Bitcoin at a gain and distributes the proceeds, that distribution may be taxable to you even if you did not sell your shares.

If you hold a Bitcoin ETF in a tax-advantaged account like a traditional IRA or Roth IRA, you do not owe taxes on gains until you withdraw the money (or never, in the case of a Roth). Consult a tax professional about how Bitcoin ETF holdings fit into your overall tax situation.

Custody and Security of Bitcoin in ETFs

Bitcoin held in an ETF is stored by a may have access to custodian, typically a specialized firm that manages digital assets. The major Bitcoin ETFs use custodians like Coinbase Custody, Fidelity Digital Assets, or similar institutions that are insured and regulated.

You do not hold the private keys to the Bitcoin yourself — the custodian does. This means you do not have to worry about losing your keys or managing a digital wallet, but it also means you are trusting a third party to safeguard the Bitcoin. The custodian is typically insured against theft and loss.

This custody arrangement is one reason some Bitcoin investors prefer owning Bitcoin directly through a digital wallet, where they control the keys. However, for investors who want Bitcoin exposure without managing digital security, ETF custody provides a familiar structure similar to how stocks are held at a brokerage.

Regulatory Status and Future Approvals

The SEC's approval of spot Bitcoin ETFs in January 2024 followed years of applications and rejections. The agency had previously denied Bitcoin ETF proposals, citing concerns about market manipulation and investor protection. The 2024 approvals reflected a shift in the SEC's stance, though the agency continues to review other cryptocurrency ETF proposals.

Ethereum spot ETFs and other cryptocurrency ETFs have also been proposed and are under review. The approval timeline for these varies, and there is no may provide they will be approved. The Bitcoin ETF approvals do not automatically clear the path for other cryptocurrency ETFs.

Regulatory changes at the federal or state level could affect how Bitcoin ETFs are taxed, traded, or regulated in the future. Staying informed about SEC announcements and regulatory developments helps you understand how changes might affect your holdings.

Frequently Asked Questions

Can I buy a Bitcoin ETF in a retirement account like an IRA?

Yes. Bitcoin ETFs can be held in a traditional IRA, Roth IRA, SEP IRA, or Solo 401(k), depending on your brokerage and plan rules. Check with your brokerage to confirm that Bitcoin ETFs are available in your specific account type. Gains in a traditional IRA are tax-deferred, while gains in a Roth IRA grow tax-free if you follow withdrawal rules.

What is the difference between buying a Bitcoin ETF and buying Bitcoin directly?

A Bitcoin ETF is simpler and requires no digital wallet or private key management. You buy it like a stock through any brokerage. Buying Bitcoin directly requires setting up a digital wallet, managing security, and using a cryptocurrency exchange. Direct ownership gives you full control but requires more technical knowledge and responsibility for security.

Do Bitcoin ETFs pay dividends?

No. Bitcoin itself does not generate income, so Bitcoin ETFs do not pay regular dividends. Your return comes only from the price appreciation of Bitcoin. Some funds may distribute proceeds from selling Bitcoin at a gain, but this is not a dividend in the traditional sense.

Which Bitcoin ETF should I choose?

Compare the annual fee, fund size, and trading volume of each ETF. Smaller fee differences compound over time, but a fund with much larger assets may offer better trading execution. All approved spot Bitcoin ETFs hold actual Bitcoin, so the core product is similar — the differences are mainly in cost and liquidity.

Can I trade Bitcoin ETFs during after-hours trading?

Bitcoin ETFs trade only during regular stock market hours (9:30 a.m. to 4 p.m. Eastern Time on weekdays). You cannot trade them during after-hours sessions. Bitcoin itself trades 24/7, so the ETF price may differ from Bitcoin's price outside market hours.

This guide is for general information only and is not medical, financial, legal, or other professional advice. For decisions specific to your situation, consult a qualified professional. See our Editorial Policy.