Bitcoin ETF vs Buying BTC Directly: What’s Better?
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Buying BTC Directly
As opposed to ETFs, buying Bitcoin directly provides you with
ownership over the BTC, regardless of whether you buy it from an exchange or P2P.
Of course, if you do buy it through an exchange such as Binance, you should consider self-custody. This means that you should take your BTC off the exchange and transfer it into a cold wallet such as Trezor or Ledger, where you control the private keys.
In crypto, there’s a popular saying that goes like this:
“Not your keys, not your Bitcoin.”
This also comes with certain responsibilities. Keeping your crypto safe can be a challenging task, especially if you have no prior experience. Worry not, however, as we’ve prepared a detailed guide on what you can do to make sure your BTC is safe.
Just as it is with ETFs, buying Bitcoin directly has its specifics. Here’s a quick summary.
Trades on cryptocurrency exchanges
You can’t buy Bitcoin on the New York Stock Exchange. You have to use a cryptocurrency exchange. The most popular ones are Binance (outside of the US) and Coinbase (US).
Investors get direct ownership of BTC
Once you buy spot BTC on a cryptocurrency exchange – you own it. You can transfer it out of the exchange to a cold storage, or you can use itto trade against other altcoins such as Ethereum.
Acquisition fees vary between crypto exchanges
Unlike ETFs, there’s no Sponsor fee. There are, however, trading fees associated with buying and selling BTC, and they vary based on the cryptocurrency exchange of choice.
Managed by you
Since you have complete ownership over the BTC you bought, you are also responsible for its safety. Self-custody comes with certain challenges, and it’s imperative that you learn about cold storage and how to keep your crypto safe.
Trades 24/7, irrespective of traditional working hours
Cryptocurrency exchanges work around the clock, so there are no limitations in terms of trading hours or weekends.
