Which Bitcoin ETF has the lowest fees? (Expense Ratio Comparison)

BlackRock iShares Bitcoin Trust (IBIT)

1. IBIT launched in January 2024 and quickly became the largest spot Bitcoin ETF by assets under management.

2. Its current expense ratio stands at 0.12%, making it one of the most cost-efficient options among major issuers.

3. BlackRock leveraged its scale and infrastructure to offer a competitive fee structure from inception.

4. The fund uses custodial services from Coinbase Custody and adheres to SEC reporting requirements with daily holdings disclosures.

5. Institutional investors have favored IBIT due to its liquidity, transparency, and low overhead cost relative to peers.

Fidelity Wise Origin Bitcoin Fund (FBTC)

1. FBTC entered the market shortly after IBIT and rapidly gained traction through Fidelity’s extensive retirement platform integration.

2. Its expense ratio is currently set at 0.25%, slightly higher than IBIT but still below the industry average for early entrants.

3. Fidelity offers tiered pricing for certain qualified retirement accounts, though the base retail fee remains fixed.

4. The fund utilizes Fidelity Digital Assets for custody and maintains real-time NAV calculations aligned with CME CF Bitcoin Reference Rate.

5. FBTC’s asset growth has been driven by employer-sponsored 401(k) pilot programs, which do not affect its stated expense ratio.

ARK 21Shares Bitcoin ETF (ARKB)

1. ARKB combines ARK Invest’s thematic investment approach with 21Shares’ European ETF expertise and U.S. regulatory compliance.

2. It carries an expense ratio of 0.21%, positioning it between IBIT and FBTC in terms of cost efficiency.

3. The fund employs cold storage custody via BitGo and publishes full holdings on a daily basis.

4. ARKB includes active management elements such as staking revenue reinvestment, though this does not alter the base expense ratio.

5. Its structure allows for seamless integration into taxable brokerage accounts without additional layer fees beyond the stated ratio.

Grayscale Bitcoin Trust (GBTC)

1. GBTC converted from a private trust to a spot Bitcoin ETF in January 2024 after a prolonged legal battle with the SEC.

2. Its current expense ratio is 1.50%, significantly higher than all newly launched competitors.

3. Legacy structural inefficiencies—including legacy lock-up periods and pre-conversion premium/discount volatility—continue to influence operational costs.

4. Grayscale has announced plans to reduce fees, but no official timeline or revised ratio has been filed with the SEC as of latest disclosure.

5. Despite the high fee, GBTC retains substantial assets due to brand recognition and long-standing institutional adoption prior to ETF conversion.

Frequently Asked Questions

Q: Do expense ratios include trading commissions or bid-ask spreads?A: No. Expense ratios reflect only the annualized management and operational fees charged by the ETF issuer. Brokerage commissions and market impact from buying/selling shares are separate and vary by platform.

Q: Can an ETF’s expense ratio change after launch?A: Yes. Issuers may file prospectus amendments with the SEC to adjust fees, subject to approval and investor notification. Past examples include WisdomTree’s temporary fee waivers during initial liquidity ramp-up phases.

Q: Are there Bitcoin ETFs with zero expense ratios?A: Not currently. All SEC-approved spot Bitcoin ETFs disclose positive, non-zero expense ratios. Fee waivers or promotional reductions may occur temporarily but are not permanent structural features.

Q: How are expense ratios calculated for physically backed Bitcoin ETFs?A: They are computed as a percentage of average daily net assets, covering custody, auditing, legal, exchange listing, and index licensing costs—excluding any performance-based incentives or third-party staking yield allocations.