BitCoin ETF: What Is It and How to Trade in Singapore
Key takeway
The US Securities and Exchange Commission (SEC) has given the green light to the first spot bitcoin exchange-traded funds (ETFs), a significant milestone anticipated to attract both retail and institutional investors to the cryptocurrency market.
At the start of 2024, after numerous setbacks, applications for Bitcoin ETFs (Exchange Traded Funds) have finally been approved. On January 10th, Eastern Time, Gary Gensler, the chairman of the Securities and Exchange Commission (SEC) in the United States, announced the approval of the first Bitcoin ETFs to be listed in the U.S. This approval includes Bitcoin ETFs from 11 companies, including major financial players like BlackRock, Fidelity, Invesco, and VanEck.
In this article, we will dive deep into the following questions:
What are Bitcoin ETFs and what does it mean for investors?
Are Singaporeans available to trade BitCoin ETF?
How to trade Bitcoin ETFs on moomoo?
What are BitCoin ETFs and what does it mean for investors?
Unveil the Bitcoin ETFs
An ETF provides a convenient method of investing in assets or a group of assets, without the need to purchase the assets themselves. Moreover, ETFs can be effortlessly traded on stock exchanges. However, since the advent of Bitcoin, acquiring ownership of the cryptocurrency entailed creating a digital wallet or registering an account with a crypto trading platform such as $Coinbase(COIN.US)$ or Binance. Unlike existing products that invest in Bitcoin futures, the recently approved spot Bitcoin ETFs will hold actual Bitcoin. The decision also marks a U-turn by the SEC. After a decade of rejection, the SEC has finally authorized Bitcoin ETFs.
Generally speaking, Bitcoin ETFs function in a similar way to the traditional ETFs. The value of a bitcoin ETF's shares reflects the performance of bitcoin. As the price of bitcoin moves, the value of the ETF shares adjusts accordingly.
Although spot Bitcoin ETFs offer a regulated and accessible way for mainstream investors to invest in digital currency, they are still required to pay expenses like management fees and brokerage commissions. But the good news is that these are offset by not having the costs in time and exchange fees to buy and hold bitcoins directly.
11 Bitcoin ETFs and their symbols approved by the SEC:
ARK 21Shares Bitcoin ETF (ARKB)
Bitwise Bitcoin ETF (BITB)
Fidelity Wise Origin Bitcoin Trust (FBTC)
Franklin Bitcoin ETF (EZBC)
Grayscale Bitcoin Trust (GBTC)
Hashdex Bitcoin ETF (DEFI)
Invesco Galaxy Bitcoin ETF (BTCO)
iShares Bitcoin Trust (IBIT)
Valkyrie Bitcoin Fund (BRRR)
VanEck Bitcoin Trust (HODL)
WisdomTree Bitcoin Fund (BTCW)
Bitcoin ETFs and their expense ratio
There are several Bitcoin ETFs with 0% management Fee, but charge after waiver
ARK 21Shares Bitcoin ETF (ARKB)
fee 0% (after waiver 0.21%), waiver 6 months or $1 billion
Bitwise Bitcoin ETF (BITB)
fee 0% (after waiver 0.20%), waiver 6 months or $1 billion
Fidelity Wise Origin Bitcoin Trust (FBTC)
fee 0% (after waiver 0.25%), waiver until July 31, 2024
Franklin Bitcoin ETF (EZBC)
fee 0.29%
Grayscale Bitcoin Trust (GBTC)
fee 1.50%
Hashdex Bitcoin ETF (DEFI)
fee 0.90%
Invesco Galaxy Bitcoin ETF (BTCO)
fee 0% (after waiver 0.39%), waiver 6 months or $5 billion
iShares Bitcoin Trust (IBIT)
fee 0.12% (after waiver 0.25%), waiver 12 months or $5 billion
Valkyrie Bitcoin Fund (BRRR)
fee 0% (after waiver 0.49%), waiver 3 months
VanEck Bitcoin Trust (HODL)
fee 0.25%
WisdomTree Bitcoin Fund (BTCW)
fee 0% (after waiver 0.3%), waiver 6 months or $1 billion
What does this mean for investors?
Although spot Bitcoin ETFs have been accessible in other markets, their approval in the US is anticipated to initiate a new era for the widely used and highly tradable cryptocurrency. With the introduction of regulated products, investors in Singapore can now acquire direct exposure to the coin, without the hazards of purchasing from unregulated exchanges or the elevated costs associated with Bitcoin futures ETFs.
Is it available to trade Bitcoin ETFs in Singapore
Yes.
In Singapore, you are generally capable of trading Bitcoin ETFs, but this depends on the specific ETFs and the platforms they use for trading. Bitcoin ETFs can be bought and sold on security exchange markets just the same as how other ETFs trade. Here are three steps for Singaporeans to trade BitCoin ETFs.
1. Choose an ETF traded through a broker.
2. Sign up for a broker who has access to the ETFs you want. For investors who would like to access ETFs on the New York Stock Exchange (NYSE) or NASDAQ blockchain economy index, they need to be allowed to access the US markets. For instance, the 11 BitCoin ETFs listed are traded on the U.S. market, which means Singaporeans willing to invest in the latest approved BitCoin ETFs are required to have a U.S. market account.
3. Deposit funds into your account and purchase the BitCoin ETF.
However, it should be noted that there are high risks related to Bitcoin ETFs, as the underlying assets they track are Bitcoins. Here are some concerns over the approval for your reference:
"The notorious price volatility of bitcoin … could expose mainstream investors to a less familiar spectrum of investment risks," said Yiannis Giokas, senior director of Moody's Analytics.
"While we approved the listing and trading of certain spot Bitcoin ETP shares today, we did not approve or endorse Bitcoin," SEC Chair Gary Gensler said in a statement. "Investors should remain cautious about the myriad risks associated with Bitcoin and products whose value is tied to crypto."
"I am concerned that these products will flood the markets and land squarely in the retirement accounts of US households who can least afford to lose their savings to the fraud and manipulation that appears prevalent in the spot bitcoin markets," Commissioner Caroline Crenshaw said in her dissent.
Trade Bitcoin ETF with moomoo
Moomoo SG can support you in investing in Bitcoin ETFs in Singapore. With simple steps, you can embark on your investment journey of Bitcoin ETFs on moomoo.
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