Can I buy a Bitcoin ETF on Fidelity, Schwab, or Vanguard?

Understanding Bitcoin ETFs and Their Availability

A Bitcoin Exchange-Traded Fund (ETF) is a financial product that allows investors to gain exposure to the price of Bitcoin without directly owning the cryptocurrency. These funds are traded on stock exchanges, making them accessible through brokerage accounts. As of now, the U.S. Securities and Exchange Commission (SEC) has not approved any spot Bitcoin ETF for listing on major exchanges, though several futures-based Bitcoin ETFs have been approved.

This distinction is crucial because futures-based ETFs track Bitcoin futures contracts rather than the actual price of Bitcoin itself. Investors who are looking to buy a Bitcoin ETF that directly mirrors the real-time value of Bitcoin may still be out of luck until regulatory approval changes.

Fidelity's Offering: What You Need to Know

Fidelity Investments offers a range of investment products, including access to crypto-related assets. While Fidelity does not currently offer a spot Bitcoin ETF, it does provide exposure to Bitcoin via other means.

One such option is the Fidelity Wise Origin Bitcoin Fund, which is available to institutional investors only. For retail investors, Fidelity allows trading in Bitcoin futures ETFs through its platform. To check if any Bitcoin ETFs are available on Fidelity:

• Log into your Fidelity account.
• Use the 'Screeners' tool under the 'Markets & Research' tab.
• Search for ETFs with keywords like 'Bitcoin' or 'crypto.'

Currently, only futures-based Bitcoin ETFs such as ProShares Bitcoin Strategy ETF (BITO) are tradable on Fidelity. These ETFs do not hold actual Bitcoin but instead invest in Bitcoin futures contracts.

Schwab's Position on Bitcoin ETF Access

Charles Schwab allows users to trade ETFs, including those tied to cryptocurrencies. Similar to Fidelity, Schwab does not offer spot Bitcoin ETFs at this time. However, it supports trading of Bitcoin futures ETFs.

To find Bitcoin-related ETFs on Schwab:

• Log into your Schwab account.
• Navigate to the 'Research' section.
• Use the ETF screener and filter by 'Thematic' or 'Sector' categories.
• Look for tickers like BITO or similar crypto-linked ETFs.

Schwab also provides educational resources about investing in cryptocurrency ETFs, helping users understand the risks and benefits associated with these instruments. It’s important to note that while these ETFs offer exposure to Bitcoin’s price movements, they come with added complexity due to their reliance on futures contracts.

Vanguard’s Stance on Crypto ETFs

Vanguard, known for its index funds and low-cost ETFs, maintains a conservative approach toward cryptocurrency investments. The company has publicly expressed skepticism about the long-term viability of Bitcoin and other digital assets. Despite this, Vanguard allows customers to trade third-party Bitcoin ETFs that are listed on major exchanges.

To access Bitcoin ETFs on Vanguard:

• Log into your Vanguard account.
• Go to the 'Investments' section.
• Use the ETF search feature and enter keywords like 'Bitcoin.'
• Review the list of available ETFs, most of which will be futures-based.

It's important to emphasize that Vanguard does not sponsor or create its own Bitcoin ETF. Any Bitcoin exposure must come from third-party providers whose ETFs are SEC-approved for public trading.

Differences Between Spot and Futures-Based Bitcoin ETFs

When considering whether you can buy a Bitcoin ETF on Fidelity, Schwab, or Vanguard, it’s essential to understand the difference between spot Bitcoin ETFs and futures-based Bitcoin ETFs.

• A spot Bitcoin ETF would directly hold Bitcoin and trade based on its real-time market price. This type of ETF is not yet available in the U.S.
• A futures-based Bitcoin ETF invests in Bitcoin futures contracts, which are agreements to buy or sell Bitcoin at a predetermined price and date. These ETFs are subject to tracking errors and contango effects, where future prices differ from spot prices.

Because none of the platforms mentioned offer spot Bitcoin ETFs, investors are limited to futures-based options. These ETFs can still provide meaningful exposure to Bitcoin’s price movement but should be approached with an understanding of how futures markets work.

Steps to Buy a Bitcoin ETF on These Platforms

If you're ready to proceed with purchasing a Bitcoin ETF, here are the steps you can follow on each platform:

• Log into your account on Fidelity, Schwab, or Vanguard.
• Navigate to the 'Trade' or 'Research' section.
• Use the ETF screener or search bar to look for Bitcoin-related ETFs.
• Select a suitable ETF such as BITO (ProShares Bitcoin Strategy ETF).
• Review the fund details, expense ratio, and performance history.
• Place a market or limit order depending on your preference.

Make sure your account is approved for ETF trading, and verify that there are no restrictions on trading crypto-related securities.

Frequently Asked Questions

Q1: Can I buy Bitcoin directly on Fidelity, Schwab, or Vanguard?While all three platforms allow access to Bitcoin through ETFs, direct ownership of Bitcoin is not supported. You can only gain exposure via futures-based ETFs or other crypto-linked products.

Q2: Are Bitcoin ETFs safe to invest in?Bitcoin ETFs carry risks similar to traditional ETFs but with added volatility due to the nature of cryptocurrency markets. Futures-based ETFs also face tracking discrepancies and expiration risks tied to futures contracts.

Q3: Will spot Bitcoin ETFs become available soon?Several asset managers have filed applications for spot Bitcoin ETFs, and regulatory discussions are ongoing. However, as of now, no final approvals have been granted by the SEC.

Q4: Do these platforms charge extra fees for trading Bitcoin ETFs?No additional fees are charged specifically for Bitcoin ETFs beyond standard trading commissions, which are typically waived for most ETF trades on these platforms. Always confirm fee schedules with your broker.