iShares Bitcoin Trust ETF (NASDAQ:IBIT) offers massive scale and liquidity, while VanEck Bitcoin ETF (NYSEMKT:HODL) provides slightly lower ongoing costs for investors seeking direct spot Bitcoin exposure.
Spot Bitcoin exchange-traded funds (ETFs) like these two funds provide investors with a streamlined way to gain exposure to the price of Bitcoin within a standard brokerage account. By holding the cryptocurrency in trust, these funds eliminate the complexities of managing digital keys and exchange wallets.
Snapshot (cost & size)
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months.
The VanEck fund is the more affordable choice for long-term holders with an expense ratio of 0.20%. The iShares trust charges 0.25%, a slightly higher fee that may be offset for active traders by its massive scale and tighter trading spreads.
Performance & risk comparison
What’s inside
iShares Bitcoin Trust ETF is engineered to replicate the market price performance of Bitcoin, providing a liquid way to access the digital asset. The fund just owns Bitcoin. It was launched in 2024. As an investment vehicle not registered under the Investment Company Act of 1940, it carries a different regulatory profile than traditional mutual funds.
VanEck Bitcoin ETF functions as a passive entity aiming to match the market returns of Bitcoin after accounting for its operational costs. It, too, just hold Bitcoin. It was launched in 2024. This fund provides direct exposure to the underlying cryptocurrency while removing the technical hurdles of wallet management. It tracks the same underlying spot price as the iShares trust but with lower overhead.
Which fund is the better buy?
If you are a believer in Bitcoin, then the fact that the cryptocurrency has slid to its lowest price in almost two years, at just around $64,000 in U.S. dollar terms, recently, probably signals an opportunity for you.
As my colleague, Dominic Basulto, points out, Bitcoin is trading around a nearly 50% decline from its all-time high of $126,000 in October 2025. Crypto investors, he says, have been waiting for months for the “bottom” in Bitcoin. High-profile fund manager Cathie Wood thinks it could finally be here. At the beginning of July, she suggested that Bitcoin is finally in recovery mode, although warning the path will be volatile.
In 2022, for example, Bitcoin sank by 64% and dipped as low as $16,000, Basulto notes. Many investors thought Bitcoin might go all the way to zero. But it rebounded. In 2023, Bitcoin delivered a 156% return to investors. In 2024, Bitcoin returned 121% to investors. It’s a volatile security.
The iShares and VanEck ETFs offer an easier way to play the potential rebound in Bitcoin than buying and holding the currency directly. Unlike other commodity funds, but similar to other foreign currency cash funds, the taxation on the ETFs is the standard short-term, long-term capital gains distinction levied by the Internal Revenue Service.
Given they are essentially identical in holdings and structure, the key differentiator has to be performance. Here we see the expense advantage of HODL (the VanEck fund, whose name refers to a rallying call famous among Bitcoin veterans). In the past three months, HODL has lost 13.61%, compared to a loss of 13.66% for IBIT, the iShares offering.
Over the year-to-date, HODL is down 32.89% versus 32.97% for IBIT. Interestingly, IBIT has the better lifetime performance, at an annualized 12.18% rate compared to 12.01% for HODL. The difference likely sits with their different inception dates: HODL launched Jan. 4, 2024, followed by IBIT the next day.
If you’re looking to invest in a Bitcoin EF, the expense advantage of HODL is your key to maximizing performance.
For more guidance on ETF investing, check out the full guide at this link.
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Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends iShares Bitcoin Trust. The Motley Fool has a disclosure policy.
Bitcoin Is its Most Affordable in Two Years. Which ETF Is Better to Invest With Now: iShares Bitcoin Trust ETF or VanEck Bitcoin ETF? was originally published by The Motley Fool
