The U.S. Securities and Exchange Commission (SEC) recently approved spot Bitcoin exchange traded funds (ETF). These ETFs give investors exposure to Bitcoin price movements without actually holding the cryptocurrency. Even though there are core investment principles that stand the test of time, the investing landscape is changing. Portfolio diversification is one of them and with the future in mind, adding an asset such as Bitcoin could be a way to go (not investing advice).
Spot Bitcoin ETFs essentially operate just like any other ETF in that they operate on the stock exchange and track the price of Bitcoin in real time. 11 ETFs were approved from the word go and they are:
While these funds are U.S.-based, Kiwi investors who don’t want to hold their own Bitcoin can readily participate in the market through New Zealand investment platforms.
Investing in Bitcoin ETFs through NZ Investing Platforms
Luckily, New Zealand does have investment platforms that Kiwis can turn to in order to invest in spot Bitcoin ETFs. With all things involving money, it pays to do some research before diving in. This also applies to the platform that you chose to invest through. Some considerations to take into account include but aren’t limited to:
- ARK 21Shares Bitcoin ETF (ARKB)
- Bitwise Bitcoin ETF (BITB)
- Fidelity Wise Origin Bitcoin Trust (FBTC)
- Franklin Bitcoin ETF (EZBC)
- Grayscale Bitcoin Trust (GBTC)
- Hashdex Bitcoin ETF (DEFI)
- Invesco Galaxy Bitcoin ETF (BTCO)
- iShares Bitcoin Trust (IBIT)
- Valkyrie Bitcoin Fund (BRRR)
- VanEck Bitcoin Trust (HODL)
- WisdomTree Bitcoin Fund (BTCW)
Fees – Platform fees and management fees – Platforms will charge a fee to buy into ETFs (this may include a forex fee since you are buying in USD). The ETFs themselves will also come with their own set of fees (expense ratio) which cover costs such as administration and operating costs. At the time of writing, these range from 0.19% (EZBC) to 1.50% (GBTC).
Majority of the fund managers are offering fee waivers of up to 12 months with some limitations; for example, IBIT’s fees are listed as 0.25% but, as per their website;
BlackRock will waive a portion of the Sponsor’s Fee for the first 12 months commencing on January 11, 2024, so that the fee will be 0.12% of the net asset value of the Trust for the first $5.0 billion of the Trust’s assets. If the fund exceeds $5.0 billion of the Trust’s assets prior to the end of the 12-month period, the Sponsor’s Fee charged on assets over $5.0 billion will be 0.25%. All investors will incur the same Sponsor’s Fee which is the weighted average of those fee rates. After the 12-month waiver period is over, the Sponsor’s Fee will be 0.25%.
Security – security should always be top of mind with any online accounts and even more so for financial services. An encrypted platform that keeps your data and money secure. From a user’s end, beyond a strong password, you’d also want the option of being able to use two-factor authentication (2FA) in case your password is compromised.
User interface – a user-friendly interface that’s easy to navigate allowing for seamless transactions (buying units), auto-invest for set-and-forget dollar cost averaging, and various order types such as market, limit & stop-loss orders.
Customer support – the level of customer support such as availability and how responsive they are to queries.
Three platforms that Kiwis can invest in Bitcoin ETFs through include Hatch, Sharesies and Tiger Brokers. Take a look below for a quick comparison of the three platforms:
 |  |  | |
| Fees | $3 USD (flat fee) | 1.90% (capped at $5 USD – on ‘Pay as you go’ plan) | $2 USD* (flat fee) |
| Currency exchange fee | 0.50% | 0.50% | 0.35%* |
| Security – Encryption | Yes | Yes | Yes |
| Security – 2FA | Yes | Yes | Yes |
| Auto-invest | Yes | Yes | Yes |
| Market, limit & stop-loss orders | Yes | Yes | Yes |
| NZ based customer support | Yes | Yes | Yes |
With regards to fees, the above are ‘regular fees’. On occasion, platforms offer sweeteners to get retail investors on board.
Tiger Brokers’ fees have an * next to them because they are currently offering $30 NZD to new users to kickstart their investment. This also comes with 4 free trades and zero forex fees for exchanging up to $2000 NZD every month for life.
Hatch and Sharesies also have sweeteners which are as follows:
Hatch – $10 NZD top-up (when you sign up with and make an initial deposit of $100 NZD or more within 14 days of signing up)
Sharesies – $5 NZD top-up (when you sign up within 30 days of clicking the link)
All three platforms are good options if you are considering investing in any of the ETFs. As with anything in the world of investing, due diligence is highly recommended. Do a bit of research on the platforms, consider what features you are looking for and go with one that ticks your boxes.
If you don’t know much about Bitcoin, get to know more about it. Bitcoin’s price movements are very volatile and the price fluctuations are to be considered in relation to your risk tolerance and investment strategy.
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