BTCO: Convenient, Cost-Effective Avenue to Spot Bitcoin Exposure

Last week, the Securities and Exchange Commission finally gave the green light for spot bitcoin exchange traded funds to list in the U.S. The Invesco Galaxy Bitcoin ETF (BTCO) is one of the 10 ETFs providing exposure to spot prices of the largest cryptocurrency.

BTCO joins the equity-based Invesco Alerian Galaxy Crypto Economy ETF (SATO) and the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC) as members of the Invesco crypto ETF suite while extending the issuer’s partnership with Galaxy Digital.

“Galaxy is a digital asset and blockchain leader, providing access to the growing digital economy by applying traditional finance expertise and deep crypto know-how, as well as advanced research engine capabilities,” according to Invesco.

Bottom line: The Invesco/Galaxy pairing signals confidence and trust — two issues that are paramount to advisors and investors wading into the cryptocurrency universe.

Bitcoin ETF BTCO Has Advantages

As noted above, the field of fresh spot bitcoin ETFs is expansive, and these products have the same investment objective. That means competitors need avenues for standing out from the pack in an effort to capture attention from advisors and investors.

BTCO accomplishes that objective. The fund’s annual fee is 0.39%, or $39 on a $10,000 investment. That’s decent among the spot bitcoin ETF field, but Invesco enhances that proposition by waiving that fee for the first six months up until BTCO’s assets under management reach $5 billion. Plus, BTCO, like its peers, could prove to be a well-timed addition to the ETF space.

Alex Pickard, vice president, research at Research Affiliates and a former bitcoin miner, said he expects bitcoin to deliver returns in excess of those posted by gold following the launch of the SPDR Gold Shares ETF (GLD) nearly two decades ago. Today, GLD is home to more than $56 billion in assets under management, easily making it the largest commodities exchange traded product. It’s possible BTCO and/or its peers could follow a similar long-term trajectory.

The debuts of spot bitcoin ETFs, such as BTCO, “legitimize bitcoin, and digital currencies in general, in the minds of investors,” wrote Pickard. “Public policy will become more accommodative to cryptocurrencies, recognizing that government agencies have signed off on the public owning this asset class in their brokerage and retirement accounts.”

Adding to the allure of BTCO and friends is the potential for increased access to advisory realm, which could stoke inflows of $50 billion to $100 billion this year, according to Standard Chartered.

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