The Best No-Brainer Way to Invest in Bitcoin

For many years, investors could buy Bitcoin (CRYPTO: BTC) only through dedicated cryptocurrency exchanges.

Bitcoin (CRYPTO: BTC) has been a hot topic among investors for the past few years. As the world's leading cryptocurrency, it has seen massive gains and also experienced periods of downturn. Despite the volatility, many investors are still interested in adding some exposure to Bitcoin in their portfolios.

One of the easiest ways to do this is through exchange-traded funds (ETFs) that are tethered to the price of Bitcoin. These ETFs began trading in April 2021 and have quickly gathered billions of dollars in assets under management (AUM). However, there's one ETF that has stood out from the pack and might still be the best no-brainer way to invest in Bitcoin.

The top-performing Bitcoin ETF

When the U.S. Securities and Exchange Commission (SEC) finally approved 11 spot price Bitcoin ETFs in January, it was a monumental moment for the cryptocurrency industry. These ETFs, which are tethered to the daily price movements of Bitcoin, allow retail and institutional investors to gain exposure to Bitcoin without having to buy, store, or نگهداری the cryptocurrency themselves.

Of the 11 ETFs, the Bitwise Bitcoin ETF (NYSEMKT: BITB) has performed the best on a total return basis over the past four months. The ETF, which has $2.16 billion in AUM, has also outperformed the Bitcoin Price Index by nearly 10 percentage points during that time frame.

As you can see, the ETF has also outperformed the Grayscale Bitcoin Trust (NYSEMKT: GBTC), which is still the largest Bitcoin ETF despite having an annual sponsor fee of 1.5%. In comparison, the Bitwise Bitcoin ETF has an annual sponsor fee of just 0.20%, making it one of the cheapest ways to gain exposure to Bitcoin in the ETF market.

All five of the top ETFs have outperformed Bitcoin itself during the past four months. The two cheapest funds -- Ark and Bitwise -- also outperformed their pricier peers. So for now, there doesn't seem to be much of a reason to pay up for the pricier spot price ETFs when their performance trails behind the cheaper ones.

Why the Bitwise Bitcoin ETF is a no-brainer buy

For some investors, it might seem smarter to simply buy Bitcoin on Coinbase, which individual trading fees, instead of paying recurring fees for Bitwise's low-cost ETF. But if you're like me and want to keep all your investments organized in a single brokerage account, then it makes sense to add some shares of this ETF to your portfolio.

I keep my Bitwise Bitcoin ETF shares in an IRA, but I can add only $6,500 to the account every year and can't cash out without incurring penalties before I'm nearly 60 years old. Those restrictions prevent me from pouring too much cash into the ETF or cashing out too early, and they encourage me to use dollar-cost averaging to offset Bitcoin's wild price swings.

Therefore, if you're bullish on Bitcoin and want to gain some exposure to its potential growth through your brokerage account, I believe the Bitwise Bitcoin ETF is still a no-brainer buy and a better overall investment than its pricier peers.