The Easiest Way to Get Bitcoin Exposure Without Buying It Directly

If you are thinking about buying Bitcoin (CRYPTO: BTC), you have plenty of options for getting exposure to the world's top cryptocurrency. You could, for example, buy it directly on a crypto exchange. Or you could buy a Bitcoin proxy stock such as Strategy (NASDAQ: MSTR).

But by far the easiest way is by buying one of the new spot Bitcoin ETFs. The first of these was launched in January 2024, and they have been a smash success. Within a year of launching, they had quickly pulled in more than $100 billion from investors.

Which Bitcoin ETF?

The only hard part, frankly, is choosing which of the spot Bitcoin ETFs you would like to buy. All told, there are now more than a dozen such ETFs.

Image source: Getty Images.

All of these spot ETFs track the price of Bitcoin on a direct basis. Thus, if the price rises, then so will the price of the ETF. Conversely, if the underlying crypto's price falls, so will the Bitcoin ETF.

Easily the most popular of these spot ETFs is the iShares Bitcoin Trust (NASDAQ: IBIT), which now has more than $61 billion in assets under management. When tracking flows into and out of Bitcoin ETFs, this is the one that is most frequently watched for signs of changes in investor sentiment.

A distant second is the Fidelity Wise Origin Bitcoin Fund (NYSEMKT: FBTC), with $14 billion in assets under management. Third overall is the Grayscale Bitcoin Trust (NYSEMKT: GBTC), with $12 billion in assets under management.

Factors to keep in mind

What makes these ETFs so attractive is that they are typically available via a traditional brokerage account. Thus, buying these Bitcoin ETFs is as easy as buying any other ETF. There's no crypto expertise required, and you don't have to worry about hooking up a blockchain wallet to your account.

That being said, you should still verify that your brokerage enables access to these ETFs. Several major brokerage firms and wealth management platforms have restricted or blocked access to spot Bitcoin ETFs, due to the potential risk involved with crypto.

Another factor to keep in mind is annual management expenses. As a general rule, you should choose a Bitcoin ETF with the lowest fees possible.

The good news is that almost all of these cryptocurrency ETFs charge tiny management expense fees, making them suitable for individual investors. For example, the iShares Bitcoin Trust charges a standard 0.25% annual expense fee. The lowest fees are charged by the recently launched Morgan Stanley Bitcoin Trust (NYSEMKT: MSBT), at just 0.14%.

Any of the new spot Bitcoin ETFs will do the job, given how similar they are. All they do is hold the crypto on your behalf, and that means they give you nearly perfect 1-to-1 exposure to its price. If Bitcoin continues to soar in value -- as many investors think it will -- then you will be able to fully participate in this upside.

Dominic Basulto has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin and iShares Bitcoin Trust. The Motley Fool has a disclosure policy.