FBTC - ETF Overview
A Comprehensive Guide to the Fidelity Wise Origin Bitcoin Fund (FBTC)
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Fidelity Wise Origin Bitcoin Fund (FBTC) - Snapshot
Overview
The Fidelity Wise Origin Bitcoin Fund (FBTC) is an exchange-traded fund that provides exposure to Bitcoin. It was launched on January 10, 2024, and is managed by Fidelity Investments. The ETF aims to track the daily USD spot price of Bitcoin.
Investment Strategy
FBTC utilizes a passive investment approach by holding Bitcoin directly. The fund's objective is to reflect the price performance of Bitcoin, utilizing a price feed from qualified trading platforms.
Top Holdings
The top holding of FBTC is Bitcoin, which constitutes 100% of the fund's assets.
Sector Allocation
FBTC is exclusively dedicated to Bitcoin, hence it lacks a traditional sector allocation. Its entire investment is in digital assets, with a specific focus on Bitcoin.
Risk Level
HIGH - Cryptocurrencies, including Bitcoin, are known for their high volatility.
Performance
The ETF, established in 2024, has seen a year-to-date return of 74.18%, a result of Bitcoin's significant increase in value this year.
Expense Ratio
The expense ratio for FBTC is 0.69%.
This means that for every $1,000 invested, the annual cost would be $6.90.
Dividend Yield
FBTC does not pay dividends.
Other Information
Inception Date: January 10, 2024.
Net Assets: Approximately $14.58 billion as of November 2024.
Storage: Over 98% of the Bitcoin held by FBTC is stored in cold wallets for security.
Similar Alternatives
Here are some global alternatives to the Fidelity Wise Origin Bitcoin Fund (FBTC) ETF:
Here are some Canadian-based alternatives to the FBTC ETF:
Purpose Bitcoin ETF (BTCC): This was the world's first Bitcoin ETF and is available in both Canadian and U.S. dollars. It offers a version hedged against foreign currency fluctuations.
CI Galaxy Bitcoin ETF (BTCX): This ETF provides exposure to Bitcoin with one of the lowest management fees among Canadian Bitcoin ETFs.
3iQ CoinShares Bitcoin ETF (BTCQ): This ETF is managed by 3iQ Corp and offers another option for Bitcoin exposure.
Evolve Bitcoin ETF (EBIT): Managed by Evolve Funds Group Inc, this ETF is another popular choice for Bitcoin investment.
Ninepoint Bitcoin ETF (BITC): This is a more recent addition to the Canadian Bitcoin ETF market.
Remember that Management Expense Ratios (MERs) are subject to change as the fund increases in size, allowing the issuer to potentially reduce the fee.
Target Investors
The target investors for the Fidelity Wise Origin Bitcoin Fund (FBTC) are:
High Risk Tolerance: Investors who are comfortable with high volatility.
Cryptocurrency Exposure: Those looking to invest in Bitcoin without directly buying and holding it.
Diversification: Investors seeking to diversify their portfolio with digital assets.
Long-Term Perspective: Those who are willing to withstand short-term price fluctuations for potential long-term gains.
Tech-Savvy Investors: Individuals who understand the technology and market dynamics of cryptocurrencies.
Reason to Invest…
Direct Exposure to Bitcoin: FBTC invests directly in Bitcoin, providing investors with exposure to the world's largest cryptocurrency.
Security: Bitcoin held by FBTC is stored using Fidelity's in-house custodial services, with a significant portion kept in cold storage to reduce the risk of theft.
Accessibility: Investors can gain exposure to Bitcoin without needing to open a cryptocurrency exchange account or purchase a hardware wallet.
Diversification: Adding Bitcoin to a portfolio can diversify investment holdings and potentially reduce overall risk.
Registered Accounts: FBTC can be held in registered accounts like TFSAs and RRSPs, offering tax advantages.
Reason Not to Invest…
High Volatility: Bitcoin is known for its high volatility, which can lead to significant price fluctuations and potential losses.
Speculative Nature: The value of Bitcoin is highly speculative, and there is no guarantee of returns.
Risk of Loss: Investors should be prepared to lose their entire investment, especially if they are investing for the short term.
Market Uncertainty: The cryptocurrency market is still relatively new and can be influenced by regulatory changes, technological issues, and market sentiment.
Regulatory Compliance: FBTC is subject to regulatory oversight, which might not appeal to those who prefer the decentralized nature of Bitcoin.
Management Fees: While relatively low, there are still management fees associated with investing in FBTC, which can impact returns.
Trading Hours: FBTC trades only during market hours, whereas Bitcoin can be traded 24/7.