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Bittime -On Wednesday (10/01/2024), the United States Securities and Exchange Commission (SEC) officially gave the green light for Bitcoin Spot Exchange-Traded Funds (ETF). This historic decision has raised an important question: is it better to buy Bitcoin outright or invest in a spot Bitcoin ETF? Let's explore how the two compare to help you make the right decision now.
A Look at What a Bitcoin Spot ETF Is
The Bitcoin Spot Exchange-Traded Fund (ETF) is a financial instrument that allows investors to gain exposure to the price of Bitcoin without having to own or store physical Bitcoin. Bitcoin ETFs are designed to track Bitcoin prices in real-time and behave like shares traded on conventional stock exchanges.
This type of investment will be listed on major exchanges such as Nasdaq, NYSE, and CBOE. To address concerns about market manipulation, Nasdaq and the CBOE have collaborated with Coinbase, the largest cryptocurrency exchange in the United States, to establish a market surveillance mechanism. It aims to ensure the integrity and transparency of the Bitcoin market.
Spot Bitcoin ETF issuers plan to charge fees of 0.20% to 0.8%, well below the average fees observed in the broader ETF market.
Apart from being backed by physical Bitcoin obtained from crypto exchanges, the Bitcoin ETF will also be maintained by safe depositories such as Coinbase Global (COIN.O).
Bitcoin Spot vs Futures ETFs
Bitcoin Spot ETFs are different from existing Bitcoin Futures ETFs. Bitcoin Futures ETFs track agreements to buy or sell Bitcoin at a predetermined price, but they may not precisely reflect price movements. Additionally, the costs associated with switching futures contracts can impact returns, making them less attractive to many investors.
While the main advantage of a Spot Bitcoin ETF is that it provides investors with a convenient way to participate in Bitcoin price movements without the complexity and risks associated with directly owning the cryptocurrency. This ETF also operates in a regulated environment, ensuring accessibility through retail investors' existing brokerage accounts.
In doing so, the Bitcoin Spot ETF opens the door for institutional and retail investors wider access to the world of Bitcoin, while providing them with better protection and a more regulated environment.
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So, Buy Bitcoin or Spot Bitcoin ETF?
The question of whether it is better to buy Bitcoin or a Bitcoin ETF (Exchange-Traded Fund) really depends on your preferences, investment goals, and comfort level. Here are some considerations between buying Bitcoin directly vs a Bitcoin Spot ETF:
Advantages of Buying Bitcoin Directly:
- Potential to gain direct profits from rising Bitcoin prices.
- Have direct ownership of physical Bitcoins.
- Full control over your crypto assets.
Benefits of Buying ETFs
- No need to worry about Bitcoin storage or security, because ETFs manage crypto assets for you.
- Automatic diversification because ETF follows the price of Bitcoin. High liquidity, can be traded on stock exchanges like regular shares.
Considerations for Buying an ETF
- You don't have direct ownership of physical Bitcoin, only shares of an ETF that tracks Bitcoin prices.
- ETF administration and management fees can impact your investment results.
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The choice between buying Bitcoin or a Bitcoin ETF depends on your investment goals. If you want to own physical Bitcoins and are comfortable with the storage and security tasks associated with them, then buying physical Bitcoins could be an option. However, if you want exposure to Bitcoin prices without the hassle of storage and security, then a Bitcoin ETF could be a good alternative.
Always do your research, consider your risk tolerance, and consult a financial professional if necessary before making any investment decisions.
How to Buy Bitcoin (BTC) on Bittime
You can buy and sell Bitcoin (BTC) in an easy and safe way via Bittime . Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti.
Bitcoin (BTC) is available on Bittime with market pairs BTC/IDR and BTC/USDT. To be able to buy BTC IDR and BTC USDT on Bittime , make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application.
Learn the complete guide on how to buy Bitcoin (BTC) on Bittime .
Monitor price chart movements of Bitcoin (BTC) , Ethereum (ETH) , Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
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DISCLAIMER : This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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