Bitcoin Nears $100K: ETFs to Ride on Its Unstoppable Rally
11/22/2024 01:36
Bitcoin is approaching the historic $100,000 milestone, driven by Trump's victory, MicroStrategy's Bitcoin purchases and the introduction of options trading on ETFs.
The rally in the world's largest cryptocurrency is showing no signs of slowdown since Donald Trump’s victory in the presidential election spurred excitement about the digital currency. Bitcoin surged past $98,000 for the first time and is approaching the historic $100,000 milestone. MicroStrategy’s (MSTR) plans to accelerate Bitcoin purchases and the introduction of options trading on U.S.-listed Bitcoin ETFs added to the strength.
The cryptocurrency has risen 45% in two weeks since the election and has more than doubled since the start of this year. Investors seeking to participate in the Bitcoin rally can consider any of the popular ETFs — BlackRock iShares Bitcoin Trust IBIT, Grayscale Bitcoin Trust ETF GBTC, Fidelity Wise Origin Bitcoin Trust FBTC, ARK 21Shares Bitcoin ETF ARKB and Bitwise Bitcoin ETF BITB.
President-elect Donald Trump has ushered in a new era of friendlier U.S. regulation for crypto. Trump embraced digital assets and vowed to make the United States “the crypto capital of the planet.” Per a Bloomberg report, Trump’s team is in talks with the digital asset sector to establish a dedicated White House role for crypto policy, boosting market sentiment (read: Bitcoin to Become a Trump-Era Symbol? ETFs to Consider).
MicroStrategy is on the buying spree for Bitcoin. It bought a record 51,780 Bitcoin between Nov. 11 and Nov. 17 for $4.6 billion, according to a US Securities and Exchange Commission filing. This follows purchases of more than 27,000 Bitcoin between Oct. 31 and Nov. 10. MicroStrategy now owns around $30 billion in Bitcoin. This has bolstered enthusiasm in the cryptocurrency markets.
Options trading for spot bitcoin ETFs went live on Nov. 19, with BlackRock being the first to launch options trading for BlackRock iShares Bitcoin Trust (IBIT). Grayscale and Bitwise will follow suit. Grayscale has initiated options for its Grayscale Bitcoin Trust (GBTC) and its Bitcoin Mini Trust (BTC), whereas Bitwise will soon debut option trading on Bitwise Bitcoin ETF Trust (BITB). Other bitcoin ETFs, such as Fidelity Wise Origin Bitcoin Fund (FBTC) and the ARK 21Shares Bitcoin ETF (ARKB), are expected to have options available soon.
Bitcoin ETFs pulled in a huge amount of capital since Election Day. Bloomberg data shows that a group of one dozen ETFs investing in Bitcoin have attracted a net inflow of $5.8 billion since Election Day. The group’s total assets have reached an unprecedented $100 billion.
Let us delve into the abovementioned ETFs in detail:
BlackRock iShares Bitcoin Trust (IBIT)
iShares Bitcoin Trust seeks to reflect the performance of the price of Bitcoin. It enables investors to access Bitcoin within a traditional brokerage account. The fund charges 25 bps in annual fees from investors. IBIT has an AUM of $41.6 billion and trades in an average daily volume of $37 million shares (read: Top ETF Winners from the Trump Trade).
Grayscale Bitcoin Trust (GBTC)
Grayscale Bitcoin Trust is the world’s largest Bitcoin ETF that enables investors to gain exposure to Bitcoin in the form of security while avoiding the challenges of buying, storing and safekeeping Bitcoin directly. It owns and passively holds actual Bitcoins through the Custodian, Coinbase Custody. Grayscale Bitcoin Trust has an AUM of $19.7 billion and charges 1.50% in annual fees from investors. It trades in an average daily volume of 3.6 million shares and is a cheaper version of Bitcoin.
Fidelity Wise Origin Bitcoin Trust (FBTC)
Fidelity Wise Origin Bitcoin Trust also offers exposure to the price of bitcoin without buying bitcoin directly in brokerage, trust and tax-advantaged accounts. It has accumulated $17 billion in its asset base. It charges 25 bps in annual fees and trades in an average daily volume of 5.3 million shares.
ARK 21Shares Bitcoin ETF (ARKB)
ARK 21Shares Bitcoin ETF has amassed $4.2 billion in its asset base. It seeks to track the performance of Bitcoin, as measured by the performance of the CME CF Bitcoin Reference Rate – New York Variant. It has an expense ratio of 0.21% and trades in a volume of 1.4 million shares per day on average.
Bitwise Bitcoin ETF (BITB)
With an AUM of $3.7 billion, Bitwise Bitcoin ETF invests directly in Bitcoin and is easily accessible from a brokerage account. It has the lowest fees among the spot Bitcoin ETFs at 0.20% and trades in a volume of 2.4 million shares per day on average.