Since their inception, cryptocurrencies have captured global attention, but this popularity has always been met with some skepticism. Many investors initially found crypto assets risky, and the high prices made even the most interested buyers hesitant about committing large sums. However, the financial landscape is evolving fast, with new options for every type of investor.

In 2024, a significant milestone was reached in the cryptocurrency market with the launch of the first spot, Bitcoin and Ether ETFs, in January and July, respectively. These ETFs offer a more accessible, lower-cost, and lower-risk alternative to directly investing in the underlying assets. These ETFs are a welcome option for those who want exposure to cryptocurrency without the hassle of directly handling the coins.

Bitcoin, the first cryptocurrency, remains dominant in the ETF space. The SEC's (Securities and Exchange Commission) approval of spot Bitcoin ETFs in January 2024 marked a significant breakthrough, allowing investors to gain exposure to Bitcoin without trading on an exchange or managing the crypto themselves. Here’s a look at the top 5 Bitcoin ETFs every crypto enthusiast should have on their radar this year.

iShares Bitcoin Trust (NASDAQ: IBIT)

This asset, managed by Blackrock, is an Bitcoin ETF that directly invests in Bitcoin and seeks to reflect Bitcoin’s price based on its performance. Since its inception, the asset has been doing very well, providing investors with sweet returns in nine months. Moreover, Blackrock has also waived the sponsor fee of 0.25% for the first twelve months commencing from January 2024. IBIT holds approx. 357k Bitcoin in custody, helping it to track the CME CF Bitcoin Reference Rate – New York Variant as a benchmark. With net assets of $29.9 billion, a daily volume of approximately 32 million, and an expense ratio of 0.12%, IBIT is the most traded bitcoin ETF, primarily favored by investors for its potentially lower costs.

Grayscale Bitcoin Trust (NYSEARCA: GBTC)

GBTC was the first Bitcoin exchange-traded product that came into trading in the US and has a long operating history. Sponsored by Grayscale, one of the premier crypto asset managers, this ETF is a must-have because of its strong fundamentals. Investing in a financial instrument considers fundamentals and specific vital numbers, and GBTC doesn’t disappoint there, either. The net AUM is $15.4 billion, and the trust holds 220,290.186 Bitcoin in total, making it 0.00079519 Bitcoin per share with a total outstanding of around 277 million. With a 1-year return of 115.56% and a YTD return of 64.88%, the current market price of GBTC trading in the range of $55-$57 makes it a lucrative ETF for crypto ETF lovers.

ProShares Bitcoin ETF (NYSEARCA: BITO)

BITO was launched in October 2021 and was the first US-approved Bitcoin ETF. BITO invests in Bitcoin futures, i.e., it aims to track Bitcoin’s price movements via futures traded on the Chicago Mercantile Exchange (CME). Since BITO is a futures-based ETF, it aligns with mainly all the SEC regulations, making it easily accessible for investors. Since there is no direct ownership of bitcoins as BITO involves bitcoin futures contracts, risks associated with direct ownership, such as security concerns regarding digital wallets, can also be avoided, and at the same time, exposure to crypto-related trading is also possible for the investors. As futures-based products tend to experience “contango” when futures prices are generally higher than spot prices, BITO doesn’t always perfectly align with the price of Bitcoin. BITO has an expense ratio of 0.95%, with an average daily trading volume of 8.5 million. With a net AUM of $1.82 billion, an impressive YTD return of 60.51%, and a 1-year return of 91.68%, the ProShares Bitcoin ETF is a perfect choice for those who want regulated and accessible exposure to Bitcoin.

Global X Blockchain & Bitcoin Strategy ETF (NASDAQ: BITS)

BITS is the perfect ETF for investors who want to have the best of both worlds, as BITS focuses on long-term growth potential through the combination of prudent Bitcoin futures positions and exposure to disruptive companies involved in cutting-edge blockchain technology. This gives BITS the upper hand as it helps the investors capture gains from both the price movements of Bitcoin and growth in blockchain technology. The Fund usually takes long positions in US-listed bitcoin futures contracts and invests, either directly or indirectly, in companies that have long-term growth potential by adopting blockchain technology. This ETF has a net AUM of $28.71 million. The stock has given a YTD return of 43.17% since its inception in November 2021 and has given whooping returns of 125.60% in the past year. A low expense ratio of 0.65% and higher returns – a perfect duo that shouts out loud to consider this ETF to buy in 2024.

Roundhill Bitcoin Covered Call Strategy ETF (NASDAQ: YBTC)

YBTC, the first US-listed bitcoin covered call ETF, is an actively managed ETF that offers the potential for high income as it focuses on generating monthly income through a covered call strategy on Bitcoin, which helps in saving the time and expense of investors of trading the options themselves. The reference asset for Roundhill Bitcoin Covered Call Strategy ETF is the ProShares Bitcoin ETF (BITO), but YBTC does not directly hold shares. It gains exposure by buying a long call and selling a short put. YBTC is one of the recent crypto-related ETFs that got into the market in January 2024, and even in that short period, the ETF has a net AUM of approx. $57 million, and the market price has increased by 19.11% since then. You must note that YBTC does not directly invest in Bitcoin, making YBTC a perfect candidate for Bitcoin ETFs to consider in 2024.

Extra Shots

While we have listed our favorites, there are a few more that we couldn’t skip :

• Invesco Galaxy Bitcoin ETF (NASDAQ: BTCO)
• ProShares Short Bitcoin ETF (NASDAQ: BITI)
• Fidelity Wise Origin Bitcoin Fund (NASDAQ: FBTC)
• Bitwise Bitcoin ETF Trust (NASDAQ: BITB) 

Investing in Bitcoin ETFs is an excellent avenue for those who want to participate in trading in the cryptocurrency market but do not want to bear the volatile risks that come associated with it. Instead, they want a secured and structured trading setup. With an ever-changing landscape, stricter regulations coming into place, and controlled exposure to the cryptocurrency market, Bitcoin ETFs will soon become favorites for investors who seek stability with minimum risk exposure in the cryptocurrency market. What is advised and what a prudent investor would always do is consider their investment goals and objectives and then choose the best alternative out of the many that would suit their requirements.

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