Invest $100 in These 2 Bitcoin ETFs for Long-Term Potential

Bitcoin is known for its price fluctuations and limited real-world applications, making it a risky investment. Despite these challenges, growing acceptance and the arrival of spot Bitcoin exchange-traded funds (ETFs) present new possibilities for those looking to invest in the cryptocurrency market.

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Bitcoin ETFs allow investors to access Bitcoin without directly owning it. For those optimistic about Bitcoin's future, here are two ETFs where a $100 investment could lead to long-term growth.

1. iShares Bitcoin Trust (IBIT)

The iShares Bitcoin Trust (NASDAQ: IBIT) has become a prominent Bitcoin ETF since its launch. With around $56 billion in assets, it is one of the largest in the industry, reflecting strong investor demand.

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Its size ensures high liquidity, enabling investors to buy and sell shares easily while keeping transaction costs low. The ETF is backed by BlackRock, a global leader in asset management, and Coinbase, which handles the secure storage of Bitcoin.

A major benefit of the iShares Bitcoin Trust is its cost efficiency. It carries an expense ratio of 0.25%, meaning an investor pays $2.50 annually for every $1,000 invested. This rate is competitive compared to similar Bitcoin ETFs.

2. Grayscale Bitcoin Mini Trust ETF (BTC)

Another noteworthy option is the Grayscale Bitcoin Mini Trust ETF (NYSEMKT: BTC). This ETF was created by transferring 10% of the holdings from Grayscale's original Bitcoin fund, providing a more affordable and accessible alternative for investors.

The standout feature of the Grayscale Bitcoin Mini Trust ETF is its low expense ratio. At 0.15%, or $1.50 per $1,000 invested, it is one of the cheapest Bitcoin ETFs available. This cost is significantly lower than Grayscale's primary Bitcoin fund, which has a 1.5% annual fee.

Lower management fees mean investors retain more of their gains. For instance, if you invest $2,000 in this ETF and Bitcoin's value rises by 10% in a year, you would save approximately $30 in fees compared to the original Grayscale Bitcoin Trust.

Important Factors to Consider Before Investing

Although Bitcoin's price has risen about 100% over the past year, it remains highly volatile. In a recent period, its value dropped nearly 13% in just a few weeks, showcasing the cryptocurrency's unpredictability.

Even a modest investment of $100 requires an understanding of the risks. Bitcoin ETFs offer a simple way to invest in Bitcoin without handling the cryptocurrency directly, but investors should be ready for significant price swings.

For those seeking a more predictable investment approach, a traditional S&P 500 index fund may offer a safer and steadier path to long-term financial growth.

Also Read: Tether May Sell Bitcoin to Comply With U.S. Stablecoin Laws