What Is Blackrock's Ishares Bitcoin Trust Etf Ibit And How To Buy?

BlackRock's iShares Bitcoin Trust ETF, or IBIT, is the world's largest Bitcoin-backed exchange-traded fund, holding approximately 500,380.09 BTC, valued at 48 billion. The Wall Street asset manager worth 9 trillion currently holds about 2.38 of the entire Bitcoin supply.

In this article, we explain everything you need to know about the iShares Bitcoin Trust ETF and guide you with investing in the leading Bitcoin-backed financial product.

The iShares Bitcoin Trust IBIT is a spot Bitcoin exchange-traded fund ETF launched by investment manager BlackRock earlier this year. The financial product allows retail and institutional investors to gain exposure to BTC without directly investing in the cryptocurrency.

IBIT was approved by the U.S. Securities and Exchange Commission SEC in January 2024. The fund offers direct exposure to Bitcoin by purchasing the asset in the spot market and tracking its daily price movements in a 11 ratio. The fund has become a key benchmark for gauging market sentiment for Bitcoin, where inflows signify a positive market, while outflows can signal a bearish market.

Here are some key benefits of the BlackRock iShares Bitcoin Trust

• Unlike direct investment in BTC through crypto exchanges, which requires investors to set up accounts and perform KYC, IBIT shares can be purchased through your existing brokerage accounts, just like any other ETF.

• It helps alleviate logistical challenges like high trading costs and complexities with tax reporting that are often associated with holding Bitcoin in a crypto wallet.

• BlackRock's Aladdin platform is designed to minimize errors in tracking the price of Bitcoin and managing expenses.

• IBIT has an expense ratio of 0.25, which is considerably lower than other spot Bitcoin ETFs trading in the US. This makes it an attractive option for investors seeking cost-effective ways to gain exposure to Bitcoin.

Launch Date January 5, 2024

Ticker IBIT

Type Commodity ETF reflecting the performance of Bitcoin prices

Exchange Nasdaq

AUM 48.43 Billion November 2024

Trading Volume An average of 66 million trades per day

Fees IBIT has a sponsor fee of 0.25, which has been temporarily reduced to 0.12 for the first twelve months or until the fund reaches 5 billion in AUM.

The iShares Bitcoin Trust ETF IBIT is trading on the Nasdaq stock exchange. Follow these steps to invest in the crypto exchange-traded product

1. Open a Brokerage Account

Set up a brokerage account on your favorite platform. You can set it up in minutes by providing your personal information, such as your name, address, contact details, date of birth, social security number, and employment details. If you have earned income, then you can purchase IBIT shares through an individual retirement account IRA.

2. Plan Your Budget

It is important to determine your investment budget before purchasing IBIT shares. It is recommended that you adopt a low-risk strategy when it comes to Bitcoin as it is a highly speculative asset. Limit your investment to about 5 of the budget and opt methods such as dollar-cost averaging to mitigate market volatility.

3. Do Your Own Research

Do your due diligence before investing in IBIT. Although the price of BTC has surged over 100 in the past year, it is not advised to invest in the asset solely based on large price swings. Bitcoin has a history of experiencing significant losses and is known to be affected by the "ride the news" phenomenon, where the price reacts quickly to current events surrounding it.

4. Place The Order

When placing the buy order, search for IBIT and specify the number of shares you would like to purchase. If the brokerage allows the purchase of fractional shares, then you can specify a dollar amount instead. You can choose between placing a market order, which executes the trade at the current price, or a limit order, which instructs the broker to execute the trade at the price you have specified.