FBTC vs. BITQ: Direct Bitcoin Exposure or Crypto Through Public Markets

Fidelity Wise Origin Bitcoin Fund(NYSEMKT:FBTC) and Bitwise Crypto Industry Innovators ETF (NYSEMKT:BITQ) offer two very different ways to invest in the crypto economy: FBTC gives direct bitcoin exposure with lower fees, while BITQ holds a basket of crypto-linked stocks and charges more for that diversification.

Fidelity Wise Origin Bitcoin Fund (FBTC) and Bitwise Crypto Industry Innovators ETF (BITQ) aim to capture the growth potential of the cryptocurrency ecosystem, but they do so through distinct approaches. FBTC does so through holding bitcoin itself, and BITQ invests in companies operating within crypto and blockchain sectors. This comparison highlights how their cost, performance, risk, and portfolio construction may appeal to investors with varying preferences for direct versus indirect crypto exposure.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.

BITQ charges a higher annual fee than FBTC, making FBTC notably more affordable for those focused on cost.

Performance & risk comparison

What's inside

BITQ targets the broader crypto economy by investing in 33 companies, with a heavy tilt toward financial services (72%) and technology (24%). Its largest holdings—Iren Ltd (NASDAQ:IREN), Coinbase Global Inc -class A (NASDAQ:COIN), and Microstrategy Inc. (NASDAQ:MSTR)—make up nearly 30% of assets, so performance hinges on these crypto-exposed firms. The fund has operated for almost five years, offering a diversified—but equity-driven—take on crypto exposure.

FBTC, in contrast, provides direct exposure to bitcoin’s price movements, with nearly its entire portfolio allocated to Bitcoin (XBTUSD). There is no sector diversification, meaning returns will closely track the cryptocurrency itself rather than the fortunes of crypto-related companies. This pure-play structure may appeal to those wanting unfiltered bitcoin exposure without the additional risks (or potential rewards) of operating companies.

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What this means for investors

Not all crypto exposure behaves the same when markets turn volatile. The Fidelity Wise Origin Bitcoin Fund and the Bitwise Crypto Industry Innovators ETF offer crypto exposure through entirely different risk channels, one tied directly to bitcoin’s price and the other shaped by public markets.FBTC provides direct exposure to bitcoin’s price, rising and falling with the asset itself. BITQ owns companies tied to crypto activity, layering business performance and stock-market sentiment on top of the crypto theme.

The contrast between the two ETFs is most evident when markets are under pressure or sentiment shifts quickly. FBTC’s moves tend to reflect bitcoin’s price action, making it easier to see what is driving performance. BITQ can behave differently. Its holdings may benefit when crypto-related businesses gain traction, but they can also struggle when equity markets reassess growth, margins, or regulation, even if bitcoin is relatively steady. Diversification across stocks broadens exposure, but it also ties results to forces well beyond the crypto asset itself.

For investors, the choice is more about exposure than conviction. FBTC is designed for those who want a direct link to Bitcoin’s price and are comfortable letting that single asset drive results. BITQ is better suited to investors who want crypto exposure filtered through publicly traded companies, and understands that stock-market forces and management execution will shape returns. The practical question is not whether you believe in crypto, but whether you want your outcome tied to bitcoin itself or to the businesses built around it.

Glossary

ETF (Exchange-traded fund): A fund holding a basket of assets, trading on an exchange like a stock.
Expense ratio: The annual fee a fund charges investors, expressed as a percentage of assets invested.
AUM (Assets under management): The total market value of all assets a fund or manager oversees.
1-yr return: The fund’s total investment gain or loss over the past 12 months, including price changes and distributions.
Beta: A measure of how volatile an investment is compared with a benchmark index, often the S&P 500.
Max drawdown: The largest peak-to-trough decline in an investment’s value over a specific period.
Total return: An investment’s overall gain or loss, including price changes plus dividends or other distributions.
Portfolio diversification: Spreading investments across different assets or sectors to reduce the impact of any single holding.
Direct exposure: When a fund invests in the asset itself, so performance closely tracks that asset’s price.
Indirect exposure: When a fund invests in companies or instruments linked to an asset, not the asset itself.
Yield: The income a fund distributes to investors, usually from interest or dividends, shown as a percentage of price.
Sector allocation: How a fund’s holdings are distributed across different industries, such as technology or financial services.

Eric Trie has no position in any of the stocks mentioned. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.