Back in January 2024, the SEC finally, reluctantly approved 11 spot bitcoin exchange-traded funds. It was not a full-throated endorsement.
“While we approved the listing and trading of certain spot bitcoin ETP [exchange-traded product] shares today, we did not approve or endorse bitcoin,” SEC Chair Gary Gensler wrote in the announcement. “Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto.”
The half-hearted tone was not a surprise. For years, the SEC had resisted giving these funds the green light — in fact, it had rejected more than 20 applications for exactly this kind of product. The regulator only relented after the U.S. Court of Appeals in Washington, D.C., ruled against one of those decisions.
Nevertheless, a new asset was born: the spot bitcoin ETF. Unlike its predecessor, the bitcoin futures ETF, the new fund’s underlying asset was bitcoin itself. This gave mainstream investors far more direct exposure to bitcoin’s prices — whether they rose or fell.
“Futures made more sense when that was the only option available in traditional investment accounts,” said Andrew Herzog, a CFP at The Watchman Group in Plano, Texas. “Spot trading has the advantage of instant execution, a simplified process ideal for beginners and lower fees.”
But spot bitcoin ETFs aren’t for everyone. Marcel Miu, founder of Simplify Wealth Planning in Austin, Texas, said he’d only recommend the products to clients “with a high risk tolerance and a clear understanding of the cryptocurrency market.”
“I approach making bitcoin recommendations to clients with caution,” Miu said. “Bitcoin is known for its significant volatility.”
READ MORE: What financial advisors need to know about spot bitcoin ETFs
Other advisors don’t recommend the products at all.
“Investing in these is nothing more than gambling,” said Kashif Ahmed, president of American Private Wealth in Bedford, Massachusetts. “The risks cannot be calculated, and if you cannot calculate a risk, why take it? It will only end in tears.”
Today, that calculation may still be impossible, but there’s far more data available. When the SEC made its announcement, many questions hung over the new ETFs: Would they be popular? Would they gain value or lose it? And, over time, how would these 11 new funds compare to each other?
Now, six months later, we have some of the answers. Below are the 11 spot bitcoin ETFs, ranked by their net flows so far. Also included are their returns, listing dates and expense ratios. All data is from Morningstar Direct and is current as of June 17, 2024.
