Ever since the Bitcoin Spot ETF was approved, many have wondered what are the differences between Bitcoin ETF and directly buying BTC? Would it be better to buy Bitcoin or the ETF?
Let's dive in!
Pros of Bitcoin Spot ETF
For traditional investors, Bitcoin ETFs simplify entry into the cryptocurrency market, avoiding the technicalities of crypto wallets and blockchain. You can be excused from managing wallets with Bitcoins, navigating online crypto exchanges, or grappling with private and public keys. Removing such technical hurdles makes it simplified, making it a more attractive proposition for those accustomed to traditional investments.
Cons of Bitcoin Spot ETF
When you purchase ETFs, you don't own the underlying Bitcoin, thus limiting your control over your investment.
While investing in spot bitcoin ETFs could save you the time and costs of exchanging and securing Bitcoins yourself, these ETFs do charge management fees to cover operational costs, diminishing your returns over time.
Is Bitcoin Spot ETF for me?
The Bitcoin Spot ETFs represent a significant evolution in cryptocurrency, offering a regulated and simplified way to gain exposure to bitcoin’s prices. However, convenience does comes additional costs with management fees.
Pros of Buying Bitcoin Directly
One of the most important advantage for direct buyers is owning their Bitcoin, giving them complete control over their assets. Upon purchasing it on a cryptocurrency exchange such as Binance, you can withdraw out to your own wallet for self-custody or leave it on the exchange.
Investors with Bitcoin are able to trade at any time, including weekends and public holidays. This cannot be done with the Bitcoin Spot ETF as it is traded like a stock counter and can only be traded during traditional stock market trading hours.
Direct ownership of Bitcoin would potentially lead to higher returns as well.
Bottom Line
It’s important to note that crypto is a volatile asset class. Before plunging into these investment waters, getting professional advice is always prudent and always DYOR .
