ETFs
Bitcoin Spot ETFs with the Largest Inflows
In January 2024, the SEC finally reluctantly approved 11 bitcoin cash exchange-traded funds (ETFs). It wasn’t a full-throated approval.
“While we have approved the listing and trading of certain Bitcoin spot ETPs [exchange-traded product] “In our actions today, we have not endorsed or supported bitcoin,” SEC Chairman Gary Gensler said. written in the ad“Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to cryptocurrencies.”
The hesitant tone is hardly surprising. For years, the SEC had refused to greenlight these funds—in fact, it had rejected more than 20 applications for such products. The regulator only relented after the U.S. Court of Appeals in Washington, D.C., ruled against one of those decisions.
However, a new asset was born: the Bitcoin Spot ETF. Unlike its predecessor, the Bitcoin Futures ETF, the new fund’s underlying asset was bitcoin itself. This gave traditional investors much more direct exposure to bitcoin prices, whether they were rising or falling.
“Futures made more sense when it was the only option available in traditional investment accounts,” said Andrew Herzog, CFP at The Watchman Group in Plano, Texas. “Spot trading has the advantage of instant execution, a simplified process that is ideal for beginners, and lower fees.”
But spot Bitcoin ETFs aren’t for everyone. Marcel Miu, founder of Simplifying wealth planning in Austin, Texas, said it would only recommend the products to customers “with a high risk tolerance and a clear understanding of the cryptocurrency market.”
“I approach my bitcoin recommendations with caution,” Miu said. “Bitcoin is known for its significant volatility.”
LEARN MORE: What Financial Advisors Need to Know About Bitcoin Cash ETFs
Other advisors do not recommend the products at all.
“Investing in these products is nothing but a game of chance,” said Kashif Ahmed, chairman of American Private Wealth in Bedford, Massachusetts. “Risks cannot be calculated, and if you cannot calculate a risk, why take it? It will only end in tears.”
Today, that calculation may still be impossible, but there is much more data available. When the SEC made its announcement, many questions hung over the new ETFs: Would they be popular? Would they gain or lose value? And, over time, how would these 11 new funds compare to each other?
Now, six months later, we have some answers. Below are the 11 bitcoin spot ETFs, ranked by their net flows to date. Also included are their yields, listing dates, and expense ratios. All data is from Morningstar Direct and is current as of June 17, 2024.