Difference Between Bitcoin Fund and Bitcoin ETF

“Every informed person needs to know about Bitcoin because it might be one of the world’s most important developments.” This is a quote by the two-time Nobel Peace Prize nominee, Leon Louw.

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Bitcoin is no doubt the largest form of cryptocurrency. It has now become a very popular item to invest in. Many major companies own this cryptocurrency, and some even have started using them to pay the salary of their employees.

Bitcoin Fund vs Bitcoin ETF

The difference between Bitcoin Fund and Bitcoin ETF is that Bitcoin ETF can only be purchased and sold at the market trading time. In contrast to that, Bitcoin Fund has a longer period of time where they can be traded. Also, Bitcoin Fund has been in the market for a longer period of time than Bitcoin ETF.

Bitcoin Fund vs Bitcoin ETF

Bitcoin Fund is a pool of resources by a number of investors who invest in Bitcoin for the result of profit in the future. There are many companies now that one can invest in to take a part of the Bitcoin Fund.

Bitcoin ETF is short for Bitcoin exchange-traded funds. They allow the public to more easily buy and sell, all over trade this particular cryptocurrency easier and at a lower price.

Comparison Table

Parameters of ComparisonBitcoin FundBitcoin ETF
Another nameBTC fundBitcoin Exchange-Trade Fund
Tax implicationsBitcoin Fund lacks in tax implications if to be compared with ETFs.They have clearer tax implications.
Founder CompanyGrayscale Bitcoin Trust (GBTC).The Purpose Bitcoin ETF (BTCC) and the Evolve Bitcoin ETF (EBIT)
Year of launch20132021
 LiquidityFunds take more time to liquidate.Bitcoin ETF’s are a little easier to liquidate in comparison to Funds.

What is Bitcoin Fund?

Bitcoin Fund is a type of fund where a group of people can pool their resources and investments and start to trade, that is, the selling and purchasing of Bitcoins over the internet.

The client-facing Bitcoin Fund is a new thing, though not being popular right now but is slowly getting better while it receives reputation as more and more people start to get the value of Bitcoin and what advantages the currency can bring to the people.

These Bitcoin Funds can be used by long-term wealth creators by someone who is just getting into the cryptocurrency, Bitcoin market and wants to learn the basics of things.

bitcoin fund

What is Bitcoin ETF?

Bitcoin ETF is a bundle of pooled resources by a number of investors. They are used by these investors in order to diversify their portfolio. The first official ETF “COIN” bitcoin ETF was released in 2013, but it was rejected.

Bitcoin ETF is particular is an investment that tracks the performance of the purchased item or asset. One does not need to trade in Bitcoins if they buy Bitcoin ETF.

Bitcoin ETFs, like Bitcoin Funds, is different from actively managed funds since both of them are used for investment as a long-term wealth creation by the investors.

bitcoin etf

Main Differences Between Bitcoin Fund and Bitcoin ETF

  1. Closed-end Bitcoin Funds can only hold a particular number of shares for people. In comparison, Bitcoin ETFs can create new shares.
  2. Bitcoin Funds are older, the year being 2013 than Bitcoin ETF, where the first Bitcoin ETF launched in 2021.
Difference Between Bitcoin Fund and Bitcoin ETF

References

  1. https://www.sciencedirect.com/science/article/pii/B9780128021170000278
  2. https://ieeexplore.ieee.org/abstract/document/8740574
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