How to buy a spot Bitcoin ETF on Fidelity?

Account Setup and Eligibility Verification

1. Open a Fidelity brokerage account if you do not already have one. The process requires submission of personal identification, tax information, and employment details.

2. Complete the account funding step by linking a bank account or transferring assets. Minimum deposit requirements vary depending on account type but are generally not enforced for ETF purchases.

3. Confirm your eligibility to trade spot Bitcoin ETFs. Fidelity restricts access to certain ETFs for retirement accounts like IRAs unless explicitly approved under specific custodial terms.

4. Review and accept Fidelity’s disclosures related to cryptocurrency-linked securities, including volatility warnings and regulatory disclaimers issued by the SEC.

Navigating the Trading Interface

1. Log into your Fidelity account and select “Trade” from the main navigation bar.

2. Choose “Stocks & ETFs” and enter the ticker symbol of the spot Bitcoin ETF you intend to purchase—examples include FBTC, ARKB, or BITO.

3. Verify the security details displayed: name, exchange listing (NASDAQ or NYSE), expense ratio, and intraday price. Spot Bitcoin ETFs display real-time net asset value (NAV) tied directly to BTC’s market price.

4. Select order type—market, limit, stop, or stop-limit—and specify quantity or dollar amount. Market orders execute immediately at prevailing bid/ask spreads; limit orders allow price control amid BTC’s rapid fluctuations.

Understanding Fee Structures and Settlement

1. Fidelity charges $0 commission for online U.S. equity and ETF trades, including spot Bitcoin ETFs, though premium services or broker-assisted trades may incur fees.

2. Bid-ask spreads for spot Bitcoin ETFs can widen during high-volatility events, especially around macroeconomic announcements or exchange outages. These spreads represent implicit transaction costs beyond stated commissions.

3. Settlement occurs on T+2—the trade date plus two business days—consistent with standard equity ETF settlement cycles. Funds are debited and shares credited accordingly after confirmation.

4. No custody of actual Bitcoin occurs. Ownership is strictly in the form of ETF shares representing pro-rata claims on underlying BTC held in cold storage by authorized participants such as Coinbase Custody or Bank of New York Mellon.

Tax Implications and Reporting

1. Gains or losses from spot Bitcoin ETF sales are treated as capital gains under IRS guidelines, classified as short-term or long-term based on holding period—not as cryptocurrency disposals.

2. Dividends are rare for spot Bitcoin ETFs since they hold no income-generating assets; any distributions typically reflect interest earned on cash collateral or minor operational reimbursements.

3. Fidelity issues Form 1099-B annually detailing proceeds, cost basis, and gain/loss calculations. Cost basis methods include FIFO, average cost, or specific identification—selection must be declared before sale.

4. Holding a spot Bitcoin ETF in a taxable brokerage account triggers annual reporting obligations, unlike direct Bitcoin holdings which require tracking every transaction across wallets and exchanges.

Frequently Asked Questions

Q: Can I buy spot Bitcoin ETFs using a Fidelity Go account?A: No. Fidelity Go is an automated advisory service with preselected model portfolios; it does not support individual ETF selection including spot Bitcoin ETFs.

Q: Do spot Bitcoin ETFs pay dividends?A: Generally no. These funds hold only Bitcoin and do not generate recurring income. Any distribution would stem from incidental cash management activities, not underlying asset yield.

Q: Is there a difference between buying FBTC and ARKB on Fidelity?A: Yes. FBTC is issued by Fidelity itself and uses Coinbase Custody; ARKB is issued by Ark Invest and holds BTC via Coinbase Custody as well—but differs in fee structure, authorized participant network, and creation/redemption mechanics.

Q: Can I transfer spot Bitcoin ETF shares from another broker to Fidelity?A: Yes, via ACATS transfer. However, confirm the receiving account supports the specific ETF ticker and that the transfer includes accurate position details to prevent settlement failure.