Dear Investors,
Okay, bad news first: If you hold bitcoin in your IRA, you might be paying 7x more for it than you should.*
Now the good news: You may be able to switch today with just a few clicks in your brokerage account-without incurring a tax bill.**
Here's the quick background.
Before spot bitcoin ETFs launched in the U.S., there were very few options to access bitcoin in a brokerage account, and those options were really expensive.
Then, on January 11, spot bitcoin ETFs launched, which let people get direct exposure to bitcoin in a brokerage account at a much lower cost than before. People seemed to like that: More than $12 billion flowed into these funds in just the first few months, making them among the most successful ETF launches of all time. But not all investors have taken advantage of the new opportunity.
That's where the math comes in.
Today, if you hold a spot bitcoin ETF in your IRA, you may be paying an expense ratio of up to 1.5% per year.
The expense ratio of the Bitwise Bitcoin ETF (BITB) is 0.20%. That is, shall we say, a gap.
If you have a bitcoin position in a self-directed IRA, you may be able to sell it and purchase BITB without having to pay any taxes on capital gains.** For someone with $10,000 invested, that generates an annual cost savings of up to $130.
One of the most well-known financial experts in the U.S., Ric Edelman, put it this way: Every year you own that ETF, "You're paying 130 basis points more than you have to."***
So take a closer look at how you're getting exposure in your IRA. And consider switching to BITB, the lowest-cost bitcoin ETF of those with at least $1 billion in assets.
BITB is not suitable for all investors. An investment in BITB is subject to a high degree of risk, has the potential for significant volatility, and could result in significant or complete loss of investment. BITB is not an investment company registered under the Investment Company Act of 1940 (the "1940 Act"). As a result, shareholders of BITB do not have the protections associated with ownership of shares in an investment company registered under the 1940 Act.
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* As of April 15, 2024, the most widely held U.S. spot bitcoin ETF had an expense ratio of 1.5°/o, which is more than 7x the 0.20% expense ratio of the Bitwise Bitcoin ETF (BITB).
** Please see your personal tax advisor for your situation. Not meant to be tax advice.
*** Source: DACFP Webinar, "What You Need To Know About the New Spot Bitcoin ETFs."March 5, 2024. |
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To learn more about BITB, visit BITBetf.com.
Risk Disclosure and Important Information
This material must be preceded or accompanied by a prospectus. Please read the prospectus carefully before investing. To obtain a current prospectus visit bitbetf.com/prospectus. |
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| The Bitwise Bitcoin ETF (BITB ) (the “Fund”) is not an investment company registered under the Investment Company Act of 1940 (the “1940 Act”) and is not subject to regulation under the Commodity Exchange Act of 1936 (the “CEA”). As a result, shareholders of BITB do not have the protections associated with ownership of shares in an investment company registered under the 1940 Act or the protections afforded by the CEA.
Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. The NAV may not always correspond to the market price of bitcoin and, as a result, Creation Units may be created or redeemed at a value that is different from the market price of the Shares. Authorized Participants’ buying and selling activity associated with the creation and redemption of Creation Units may adversely affect an investment in the Shares.
The amount of bitcoin represented by a Share will continue to be reduced during the life of the Fund due to the transfer of the Fund’s bitcoin to pay for the Sponsor’s management fee, and to pay for litigation expenses or other extraordinary expenses. This dynamic will occur irrespective of whether the trading price of the Shares rises or falls in response to changes in the price of bitcoin.
There is no guarantee or assurance that the Fund’s methodology will result in the Fund achieving positive investment returns or outperforming other investment products.
Investors may choose to use the Fund as a means of investing indirectly in bitcoin. Because the value of the Shares is correlated with the value of the bitcoin held by the Fund, it is important to understand the investment attributes of, and the market for, bitcoin.
Bitcoin Risk. There are significant risks and hazards inherent in the bitcoin market that may cause the price of bitcoin to fluctuate widely. The Fund’s bitcoin may be subject to loss, damage, theft or restriction on access. Investors considering a purchase of Shares should carefully consider how much of their total assets should be exposed to the bitcoin market, and should fully understand, be willing to assume, and have the financial resources necessary to withstand the risks involved in the Fund’s investment strategy.
Liquidity Risk. The market for bitcoin is still developing and may be subject to periods of illiquidity. During such times it may be difficult or impossible to buy or sell a position at the desired price. Possible illiquid markets may exacerbate losses or increase the variability between the Fund’s NAV and its market price. The lack of active trading markets for the Shares may result in losses on investors’ investments at the time of disposition of Shares.
Regulatory Risk. Future and current regulations by a U.S. or foreign government or quasi-governmental agency could have an adverse effect on an investment in the Fund.
Blockchain Technology Risk. Certain of the Fund’s investments may be subject to the risks associated with investing in blockchain technology. The risks associated with blockchain technology may not fully emerge until the technology is widely used. Blockchain systems could be vulnerable to fraud, particularly if a significant minority of participants colluded to defraud the rest. Because blockchain technology systems may operate across many national boundaries and regulatory jurisdictions, it is possible that blockchain technology may be subject to widespread and inconsistent regulation.
Nondiversification Risk. The Fund is nondiversified and may hold a smaller number of portfolio securities than many other products. To the extent the Fund invests in a relatively small number of issuers, a decline in the market value of a particular security held by the Fund may affect its value more than if it invested in a larger number of issuers.
Recency Risk. The Fund is recently organized, giving prospective investors a limited track record on which to base their investment decision. If the Fund is not profitable, the Fund may terminate and liquidate at a time that is disadvantageous to Shareholders.
Bitwise Investment Advisers, LLC serves as the sponsor of the Fund. Foreside Fund Services, LLC serves as the Marketing Agent for BITB, and is not affiliated with Bitwise Investment Advisers, LLC, Bitwise, or any of its affiliates.
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Bitwise Asset Management, 250 Montgomery St., Suite 200
San Francisco, CA 94104, United States |
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