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Bitcoin regained momentum in the past few weeks, driven by rate-cut cycles in most major economies, big inflows into spot ETFs and rising odds of a Trump victory in next week’s U.S. elections. The world's largest cryptocurrency surged to $71,000 for the first time since June but remains 54% below its record high of around $73,750 made in early March (read: Bitcoin ETFs to Shine as Inflows Surge and Bullish Hopes Rise).
Investors seeking to participate in the Bitcoin rally can consider any of the popular ETFs — BlackRock iShares Bitcoin Trust (IBIT - Free Report) , Grayscale Bitcoin Trust ETF (GBTC - Free Report) , Fidelity Wise Origin Bitcoin Trust (FBTC - Free Report) , ARK 21Shares Bitcoin ETF (ARKB - Free Report) and Bitwise Bitcoin ETF (BITB - Free Report) .
Rate Cut Cycle
Central banks around the world, including the Federal Reserve and European Central Bank (ECB), have been cutting interest rates to combat slow economic growth.
The Fed kicked off the new rate cycle era and enacted the first rate cut since 2020 by initiating a 50-bps reduction in interest rates last month after holding it at a 23-year high for 14 consecutive months since July 2023. The central bank projects two more rate cuts of 50 bps in its final two meetings this year, which are due in November and December. It indicates another 100-bps rate cut next year and a 50-bps cut in 2026, which means four rate cuts in 2025 and two in 2026.
Meanwhile, the ECB delivered its third interest rate cut of the year as inflation risks in the European Union eased faster than expected. The central bank lowered the deposit rate by a further 25 bps at its October meeting.
Inflows to ETFs
Bitcoin ETFs saw huge inflows spurred by expectations of a reduction in borrowing costs, which led to greater demand for speculative assets. Spot Bitcoin ETFs in the United States have attracted approximately $3.3 billion in net inflows this month, Bloomberg reported. Per CoinShares, Bitcoin funds saw $920 million in inflows for the week ending Oct. 25, bringing year-to-date inflows to $25.4 billion. This followed significant inflows into 11 U.S. spot-based ETFs for the week ending Oct. 18, accumulating over $2.1 billion in net inflows, according to Farside Investors.
Trump Trade
Bitcoin is viewed by some as a so-called Trump trade as Republican presidential nominee Donald Trump embraced digital assets during campaigning. Donald Trump is supportive of cryptocurrencies and has vowed to make United States the crypto capital of the planet. Per a Bloomberg report, Trump is ahead in prediction markets, while polls show a neck-and-neck race against Democratic candidate Vice President Kamala Harris (read: Bitcoin ETFs Surge: Political Uncertainty Meets Digital Opportunity).
Let’s delve into the abovementioned ETFs in detail:
iShares Bitcoin Trust seeks to reflect the performance of the price of Bitcoin. It enables investors to access Bitcoin within a traditional brokerage account. The fund charges 25 bps in annual fees from investors. IBIT has AUM of $27.1 billion and trades in an average daily volume of $25 million shares.
Grayscale Bitcoin Trust is the world’s largest Bitcoin ETF that enables investors to gain exposure to Bitcoin in the form of security while avoiding the challenges of buying, storing and safekeeping Bitcoin directly. It owns and passively holds actual Bitcoins through the Custodian, Coinbase Custody. Grayscale Bitcoin Trust has an AUM of $15 billion and charges 1.50% in annual fees from investors. It trades in average daily volume of 3 million shares.
Fidelity Wise Origin Bitcoin Trust also offers exposure to the price of bitcoin — without buying bitcoin directly — in brokerage, trust and tax-advantaged accounts. It has accumulated $12.6 billion in its asset base. It charges 25 bps in annual fees and trades in an average daily volume of 5 million shares.
ARK 21Shares Bitcoin ETF has amassed $3.3 billion in its asset base. It seeks to track the performance of Bitcoin, as measured by the performance of the CME CF Bitcoin Reference Rate – New York Variant. It has an expense ratio of 0.21% and trades in a volume of about 1.2 million shares per day on average.
With AUM of $2.7 billion, Bitwise Bitcoin ETF invests directly in Bitcoin and is easily accessible from a brokerage account. It has the lowest fees among the spot Bitcoin ETFs at 0.20% and trades in a volume of 2 million shares per day on average.
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5 ETFs to Tap the Ongoing Bitcoin Rally
Bitcoin regained momentum in the past few weeks, driven by rate-cut cycles in most major economies, big inflows into spot ETFs and rising odds of a Trump victory in next week’s U.S. elections. The world's largest cryptocurrency surged to $71,000 for the first time since June but remains 54% below its record high of around $73,750 made in early March (read: Bitcoin ETFs to Shine as Inflows Surge and Bullish Hopes Rise).
Investors seeking to participate in the Bitcoin rally can consider any of the popular ETFs — BlackRock iShares Bitcoin Trust (IBIT - Free Report) , Grayscale Bitcoin Trust ETF (GBTC - Free Report) , Fidelity Wise Origin Bitcoin Trust (FBTC - Free Report) , ARK 21Shares Bitcoin ETF (ARKB - Free Report) and Bitwise Bitcoin ETF (BITB - Free Report) .
Rate Cut Cycle
Central banks around the world, including the Federal Reserve and European Central Bank (ECB), have been cutting interest rates to combat slow economic growth.
The Fed kicked off the new rate cycle era and enacted the first rate cut since 2020 by initiating a 50-bps reduction in interest rates last month after holding it at a 23-year high for 14 consecutive months since July 2023. The central bank projects two more rate cuts of 50 bps in its final two meetings this year, which are due in November and December. It indicates another 100-bps rate cut next year and a 50-bps cut in 2026, which means four rate cuts in 2025 and two in 2026.
Meanwhile, the ECB delivered its third interest rate cut of the year as inflation risks in the European Union eased faster than expected. The central bank lowered the deposit rate by a further 25 bps at its October meeting.
Inflows to ETFs
Bitcoin ETFs saw huge inflows spurred by expectations of a reduction in borrowing costs, which led to greater demand for speculative assets. Spot Bitcoin ETFs in the United States have attracted approximately $3.3 billion in net inflows this month, Bloomberg reported. Per CoinShares, Bitcoin funds saw $920 million in inflows for the week ending Oct. 25, bringing year-to-date inflows to $25.4 billion. This followed significant inflows into 11 U.S. spot-based ETFs for the week ending Oct. 18, accumulating over $2.1 billion in net inflows, according to Farside Investors.
Trump Trade
Bitcoin is viewed by some as a so-called Trump trade as Republican presidential nominee Donald Trump embraced digital assets during campaigning. Donald Trump is supportive of cryptocurrencies and has vowed to make United States the crypto capital of the planet. Per a Bloomberg report, Trump is ahead in prediction markets, while polls show a neck-and-neck race against Democratic candidate Vice President Kamala Harris (read: Bitcoin ETFs Surge: Political Uncertainty Meets Digital Opportunity).
Let’s delve into the abovementioned ETFs in detail:
iShares Bitcoin Trust (IBIT - Free Report)
iShares Bitcoin Trust seeks to reflect the performance of the price of Bitcoin. It enables investors to access Bitcoin within a traditional brokerage account. The fund charges 25 bps in annual fees from investors. IBIT has AUM of $27.1 billion and trades in an average daily volume of $25 million shares.
Grayscale Bitcoin Trust (GBTC - Free Report)
Grayscale Bitcoin Trust is the world’s largest Bitcoin ETF that enables investors to gain exposure to Bitcoin in the form of security while avoiding the challenges of buying, storing and safekeeping Bitcoin directly. It owns and passively holds actual Bitcoins through the Custodian, Coinbase Custody. Grayscale Bitcoin Trust has an AUM of $15 billion and charges 1.50% in annual fees from investors. It trades in average daily volume of 3 million shares.
Fidelity Wise Origin Bitcoin Trust (FBTC - Free Report)
Fidelity Wise Origin Bitcoin Trust also offers exposure to the price of bitcoin — without buying bitcoin directly — in brokerage, trust and tax-advantaged accounts. It has accumulated $12.6 billion in its asset base. It charges 25 bps in annual fees and trades in an average daily volume of 5 million shares.
ARK 21Shares Bitcoin ETF (ARKB - Free Report)
ARK 21Shares Bitcoin ETF has amassed $3.3 billion in its asset base. It seeks to track the performance of Bitcoin, as measured by the performance of the CME CF Bitcoin Reference Rate – New York Variant. It has an expense ratio of 0.21% and trades in a volume of about 1.2 million shares per day on average.
Bitwise Bitcoin ETF (BITB - Free Report)
With AUM of $2.7 billion, Bitwise Bitcoin ETF invests directly in Bitcoin and is easily accessible from a brokerage account. It has the lowest fees among the spot Bitcoin ETFs at 0.20% and trades in a volume of 2 million shares per day on average.