How to compare IBIT, FBTC, and ARKB? (Top ETF Analysis)

Underlying Asset Composition

1. IBIT holds exclusively Bitcoin in cold storage, with each share representing a fixed fraction of one BTC, adjusted for fees and custodial costs.

2. FBTC also tracks Bitcoin but utilizes Fidelity’s proprietary custody infrastructure and includes minor treasury bill exposure to generate yield on uninvested cash balances.

3. ARKB allocates approximately 95% to Bitcoin and reserves up to 5% for strategic allocations to Bitcoin-related equities, including mining firms and infrastructure providers.

4. The diversification element in ARKB introduces equity market correlation not present in IBIT or FBTC, altering its volatility profile during macroeconomic shifts.

5. All three ETFs prohibit lending or staking of underlying BTC, aligning with SEC guidance on spot Bitcoin ETF structural safeguards.

Fees and Expense Ratios

1. IBIT charges an annual expense ratio of 0.12%, making it one of the most cost-efficient spot Bitcoin ETFs available to retail investors.

2. FBTC operates at 0.25%, reflecting Fidelity’s brand premium and higher operational overhead tied to its institutional-grade custody framework.

3. ARKB carries a 0.21% fee, positioned between IBIT and FBTC—its structure supports active management oversight of the equity sleeve, contributing to marginally elevated costs.

4. Fee differentials compound over time: a $100,000 position held for three years incurs $360 in IBIT fees versus $750 for FBTC.

5. No ETF waives or rebates fees during launch periods; all expense ratios are applied daily based on net asset value.

Liquidity and Trading Metrics

1. IBIT consistently ranks first in average daily volume among Bitcoin ETFs, frequently exceeding $2 billion per session across major U.S. exchanges.

2. FBTC maintains tight bid-ask spreads averaging 0.03%, supported by deep market maker participation and Fidelity’s integration with primary liquidity venues.

3. ARKB exhibits wider intraday spreads—often 0.08% to 0.12%—due to lower average volume and complexity introduced by its hybrid asset mandate.

4. Authorized Participants for IBIT include nine firms, while FBTC and ARKB each list seven, influencing creation/redemption efficiency during volatility spikes.

5. All three ETFs settle trades via DTC and comply with Regulation NMS requirements for price transparency and order routing disclosures.

Custodial Infrastructure

1. IBIT relies on Coinbase Custody, leveraging its SOC 2 Type II attestation and multi-sig cold storage architecture across geographically dispersed vaults.

2. FBTC uses Fidelity Digital Assets’ custody solution, which incorporates hardware security modules certified to FIPS 140-2 Level 3 standards and segregated client wallets.

3. ARKB employs BitGo as its custodian, integrating institutional-grade insurance covering 98% of assets held in cold storage.

4. None of the custodians permit third-party access to private keys; all sign-off protocols require dual control and time-delayed execution.

5. Each ETF publishes quarterly custody attestations verified by independent auditors, disclosing wallet addresses and reserve verification methodologies.

Common Questions and Answers

Q: Do any of these ETFs distribute dividends?None distribute income. Bitcoin generates no yield, and the equity portion of ARKB does not trigger dividend distributions to ETF shareholders.

Q: Can I hold IBIT, FBTC, or ARKB in a traditional IRA?Yes. All three are approved for inclusion in self-directed IRAs through custodians that support ETF trading and meet IRS eligibility criteria.

Q: Are gains from selling shares taxed as collectibles?No. Shares are classified as securities under IRS guidelines; long-term capital gains apply after a one-year holding period.

Q: How often is the Bitcoin holdings data updated?Each ETF discloses holdings daily on its official website, with full portfolio reports published weekly in accordance with SEC Form N-PORT requirements.