Bitcoin ETF vs Buying BTC Directly: What’s Better?
2/4
What is a Spot Bitcoin ETF?
Exchange-traded funds have been a cornerstone in the world of traditional finance for many years.
In essence, an ETF represents a basket (or individual) of assets, and it trades on an exchange just like a regular stock does. It can track the price of various types of assets, including but not limited to securities, commodities, or other assets. It can track multiple assets or just one (as is the case with the spot Bitcoin ETF).
In the case of the Bitcoin ETFs, they provide a traditional and
well-regarded investment vehicle to gain exposure to the price of BTC.
There is, however, a technical difference between the ETF itself and the asset that it tracks. Since the ETF itself is a standalone product –it has a market of its own and trades independently of the asset that underpins it. This is why there might be a difference between the ETF price and the net asset value (NAV) of the underpinning product.
There are other important takeaways that characterize the Bitcoin exchange-traded funds, so let’s have a look at a comprehensive summary.
