BITCOIN ACCESS MADE EASY WITH AN ETF

Bitcoin is the world’s leading and most widely adopted cryptocurrency and the first form of internet-native money to gain widespread global adoption. Bitcoin allows for peer-to-peer transactions outside of central intermediaries like banks. This is accomplished through blockchain technology.

As bitcoin has grown in popularity, so have the investment options. One of the ways investors can invest directly in bitcoin is through crypto exchanges. For investors that prefer the convenience of ETFs, bitcoin ETFs such as IBIT provide exposure through a traditional brokerage account. 

Bitcoin ETFs are generally accessible on traditional brokerage platforms — the same place investors can also purchase stocks, bonds, and other ETFs.

Bitcoin is the largest and most liquid cryptocurrency and represents over 50% of the $1.5 trillion cryptocurrency market. Bitcoin has maintained its dominance even as the number of cryptocurrencies has grown to over 20,000.³ Bitcoin can be thought of as a payment asset, with network size and adoption being critical. As such, bitcoin has a competitive advantage over any would-be challengers, which is why it has not been surpassed.

Digital Assets: An umbrella term that refers to cryptoassets, stablecoins, and financial assets issued as tokens on a blockchain.

Cryptoassets, or cryptocurrencies, or crypto:  Digitally-native assets issued on a blockchain, utilizing cryptography, peer-to-peer networking, and a public ledger to regulate the generation of new units, verify the transactions, and secure the records of ownership without reliance on an intermediary.

Bitcoin: The world’s leading and most widely adopted cryptocurrency. It is mined, stored, and transferred on a peer-to-peer network via a public ledger, the blockchain.

Blockchain: The technological foundation of all elements of the ecosystem, including cryptocurrencies, tokenization, and DeFi.  A blockchain is a distributed database that is shared amongst the nodes of a network of computers that enables real-time consensus. As a database, a blockchain stores information in digital format, maintaining a secure and decentralized record of transactions. The core innovation of blockchain technology is that it supports the fidelity and security of a record of data and helps generate trust without the need for a trusted third party.

While investors should ultimately consult with a financial professional to determine if an investment in bitcoin aligns with their investment goals, there are several factors to consider. Bitcoin has had periods of significant outperformance relative to major asset classes since its inception, but it has come with significant volatility.⁴ Investors with a higher risk tolerance may be inclined to allocate more of their portfolio to bitcoin. Every investor’s situation and goals are unique, which emphasizes the need to consult a financial professional.

Bitcoin ETFs help alleviate some of the challenges of investing directly in bitcoin, such as storage. Traditional forms of investing directly in bitcoin require deciding where to store the purchased bitcoin, which can be in a crypto wallet or on a crypto exchange. This approach gives the investor certain direct responsibilities in preventing security risks such as theft or loss of private keys, which are essentially passcodes to a crypto wallet. With a bitcoin ETF, investors own shares of the ETF, removing the need to determine where to store their bitcoin, as this is handled by the ETF's custodian. It’s important to note, however, that investing in a bitcoin ETF still involves a high degree of risk, including possible loss of principal.

Bitcoin is subject to the same tax laws as property. The IRS requires reporting of each bitcoin transaction, which is subject to capital gains tax.⁵ Investors should consult a tax or financial professional for more information on how they may be impacted by bitcoin tax laws.​