ETF Insights Report – iShares Bitcoin Trust ETF – IBIT

iShares Bitcoin Trust ETF – IBIT (And IBIT.NO)

The investment seeks to reflect generally the performance of the price of Bitcoin. The shares are intended to constitute a simple means of making an investment similar to an investment in Bitcoin rather than by acquiring, holding and trading Bitcoin directly on a peer-to-peer or other basis or via a digital asset exchange. The fund was introduced in Canada in 2025, which allows Canadians to buy IBIT.NO on the Neo Exchange for the same exposure, but in Canadian currency.

Focus area	Score	★★★★★
Performance (CAGR)	17.52%	★★★★★
Fees (MER)	0.25%	★★★★★
Volatility (Beta)	NA	NA
Distribution (Yield)	NA	NA
Valuation (Forward P/E)	NA	NA
5-year earnings growth	NA	NA

Pros

The cheapest Bitcoin ETF option for investors in North America at this point in time
The fund makes the buying and selling of Bitcoin much easier than it has been in the past
The significantly lower fees of this fund make it a viable option for Canadian investors to switch out of high-fee CAD Bitcoin ETFs
Bitcoin has been one of the best-performing asset classes in North America
iShares released a Canadian version of IBIT in 2025, trading on the NEO Exchange under the ticker IBIT.NO. This now allows Canadians to buy the fund without exchanging currencies

Cons

Even though it is the oldest crypto out there, the technology and adoption of crypto is still in its infancy
Bitcoin is highly volatile. As a result, investors should expect 50%+ swings in price. This fund should only be held by those with a high tolerance for risk, and portfolio allocations to Bitcoin have to be well thought out

This fund’s strategy is relatively simple, regardless if you buy the CAD or USD version. It holds Bitcoin directly and then offers its units to investors so that they can participate in Bitcoin’s price movements without having to go through the complexities of purchasing cryptocurrency on an exchange.

Over the years, many investors have wanted exposure to Bitcoin but found the task of opening up an account at a crypto exchange and purchasing it to be a bit too complex. To add to this, the industry is full of scams and fraud due to the difficulties when it comes to tracking and recovering digital currency. This has led to many people who want exposure to the asset avoiding it.

We’ve had crypto ETFs in Canada for quite some time. Because of the lack of crypto ETFs in the United States, Canadian fund managers were able to charge egregiously high fees to hold them, often in excess of 1%.

With the emergence of U.S.-based ETFs, competition flooded the market in a matter of a day, and we are now presented with much cheaper options.

Simply put, IBIT is the lowest-cost fund on the market today, giving you instant exposure to the price of Bitcoin. The fund initially had a promotional management fee of 0.12% for the first year of its existence or whenever it got to $5B in assets under management. After that, fees would rise to 0.25%. The fund blew through $5B in AUM quickly, but its 0.25% fee is still the lowest in the industry.

Sector Risk	High
Concentration Risk	High
Geographical Risk	NA
Liquidity Risk	Low

Cryptocurrencies are highly volatile and highly speculative. Although the sentiment around Bitcoin is relatively bullish right now, there is zero guarantee the cryptocurrency will reach any sort of major adoption as a currency or continue to increase in popularity.

Bitcoin itself has no underlying intrinsic value, and pricing movements will be primarily driven by sentiment. If you’re going to invest in a fund like this, you have to be willing to lose a significant portion of your investment. Unlike a publicly traded company, there are no cash flows generated by the currency, no underlying assets owned by the cryptocurrency, and, to this date, no real large-scale use-case for Bitcoin overall.

The fund will be prone to wild price swings. In a returns chart, you wouldn’t see this at this point in time with IBIT, primarily because it debuted during a bull market when it comes to Bitcoin. However, the currency has been known to drop anywhere from 60-90% in the past, and we cannot rule out the possibility of it doing so again.

In addition to the overall risks of owning Bitcoin, the fund is also a USD-traded fund. This means if you are Canadian, you are going to be exposed to the fluctuating prices of not only Bitcoin but the currency differences in CAD and USD. It is possible to mitigate this by owning the Canadian version of the fund in IBIT.NO, but ultimately that is up to you.

Top 10 Holdings	Allocation
Bitcoin	100%

This is a pure Bitcoin fund. IBIT simply purchases Bitcoin with the inflows it receives into the fund and as such, investors will be exposed to the movements in the price of the cryptocurrency.

The main bull thesis on Bitcoin is its limited supply of 21 million coins. This, in theory, makes it more attractive than a “fiat” currency (a national currency that has no backing and is solely valued based on the public’s faith in the currency’s issuer). The ability for countries to print an infinite amount of their currency presents additional risks to that currency that are not inherently present with Bitcoin in theory due to its limited supply.

Although Bitcoin was mostly looked at as a taboo investment by institutional investors since its inception, it is now being adopted and purchased institutionally at a rapid pace. We can see major corporations such as MicroStrategy and Tesla add Bitcoin to their balance sheets while major fund managers like Proshares, iShares, VanEck, Global X, and Grayscale are creating exchange-traded funds that track the asset.

Although the industry is ripe with scams, the underlying blockchain technology’s intention is to add more transparency and security when it comes to transactions, which, if wide-scale adoption and use cases occur, should reduce scams and fraudulent activity.

While many major banks and governments control their respective currencies and can monitor the purchasing activity of consumers, Bitcoin’s decentralized blockchain ensures that no single entity has control over it.

On the flip side, there are always additional risks when it comes to crypto in the form of regulations. Government crackdowns can easily kill the momentum of the cryptocurrency. In addition to this, many environmental issues have been brought to the table due to the extensive use of electricity to mine Bitcoin and run the network overall.

	IBIT	GBTC	BITU
Returns	✅
Diversification	✅	✅	✅
Fees	✅
Tax efficiency	✅	✅	✅
Distribution

Historically, there isn’t any history we can go off of to determine which Bitcoin ETF has been “the best.” However, because most of these funds simply own Bitcoin and track the returns of Bitcoin, the difference in the funds is primarily going to be fees, as higher fees will ultimately erode a fund’s returns.

Theoretically, if we take two identical funds, one with a 1% fee and the other with a 0.25% fee, the 1% fund will lag the 0.25% fund by 0.75% per year. It doesn’t sound like much on the surface, but over the long term, these high fees will add up.

Grayscale’s GBTC fund is the longest-standing fund on this list but also has the largest fees. With the new funds in the U.S. coming to market, the fund has undergone a significant amount of net outflows (money leaving the fund), while funds like IBIT and BITU are seeing record inflows. With Grayscale’s fees of 1.5% and IBIT’s of 0.25%, it is almost a no-brainer to make the switch. To counteract this, Grayscale spun off a fund called the “Mini Bitcoin” ETF back in 2024, one with lower fees.

Overall, IBIT should be able to put up the best returns relative to the price of Bitcoin out of all the Canadian and U.S. funds because of its low-fee nature. I myself moved from holding a high-fee Canadian fund with an expense ratio of 1.4% to IBIT when it came out. Yes, I needed to convert currencies, but the 1.5% fee I paid on Wealthsimple Trade will be made up in lower fees in just a little over a year.

The space is going to get fiercely competitive over the next few years, which ultimately benefits us as retail investors. I’d expect some “fee wars” over the next bit here as each major institution is dead set on their Bitcoin ETF becoming the most attractive.

IBIT doesn’t pay a distribution. It aims to track the price of Bitcoin solely, and investors can then realize capital gains or losses when they sell their positions. Some Bitcoin funds do pay distributions due to the use of derivatives, but most of these funds lag the overall returns of Bitcoin extensively and are not investments I’d look to own.

Although Bitcoin has been around for a while, it is in its infancy when we look to global adoption. The institutional adoption and interest in the currency is seemingly just getting started. If the trend continues, there should be upside in price levels today.

That said, this fund is not without extensive risk. In my opinion, it should be treated as a purely speculative asset. It should be allocated inside of your portfolio as one. It is easy to get caught up in a bit of recency bias due to the runup in price and allocate way too much of your portfolio to the currency only to witness the gut-wrenching volatility it will no doubt have during its next correction and realize you’ve gone way overboard. I hold Bitcoin as a core position in my portfolio via IBIT, and allocation-wise, it makes up no more than I would allocate to a single core stock position, around 5%.

This fund is the best Bitcoin fund in North America at this point, in my opinion. But that doesn’t mean that everyone should own it. If you’ve got a quick trigger finger when it comes to selling positions or you simply do not have the risk tolerance to withstand 50-80% drawdowns in price, you will likely want to avoid this fund.

An investment in Bitcoin must be made with a long-term mentality and a true belief in the underlying thesis the crypto presents. If you’re purchasing it purely out of the speculative nature that it simply goes up in price, you’re likely to make mistakes down the line in terms of over-allocating yourself on the way up or panic selling on the way down.

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