Bitcoin ETFs: The New Way In

On January 10, 2024, the US Securities and Exchange Commission approved eleven spot bitcoin ETFs in a single day. BlackRock, Fidelity, Ark Invest, Invesco, VanEck, Bitwise — institutions that collectively manage trillions of dollars in assets — launched products that buy and hold actual bitcoin on behalf of ordinary investors. BlackRock's IBIT fund alone pulled in over fifty-two billion dollars in assets within its first year. That made it the fastest ETF in the history of US financial markets to reach fifty billion dollars — faster than any gold ETF, any bond ETF, any equity fund ever launched.

You do not need to understand wallets or seed phrases to use a bitcoin ETF. You do not need to open an account on a crypto exchange. For millions of people, ETFs have become the primary gateway into bitcoin — and in Switzerland specifically, there is a version of this that has been available on the Swiss stock exchange since before the US even considered approving it.

This is the biggest change in bitcoin accessibility since exchanges were invented.

What an ETF Actually Is

ETF stands for Exchange-Traded Fund.

Imagine you want exposure to gold, but you do not want to physically store gold bars in your home or arrange secure vaulting. You do not want to deal with insurance, or the logistics of selling physical gold when you need cash. Instead, you buy shares in a gold fund. The fund holds the actual gold, stored in a professional vault. Your share represents a proportional claim on that gold. When the price of gold rises, the value of your shares rises with it. When you want to sell, you sell your shares on a stock exchange, just like selling any other stock, and the money hits your account within a couple of days.

A spot bitcoin ETF works exactly the same way, with bitcoin replacing gold. The fund holds actual bitcoin, stored in custody with a regulated financial institution. You buy shares in the fund through a standard brokerage account. The share price tracks bitcoin's value. When bitcoin rises, your shares rise. When you want out, you sell your shares on the exchange.

A spot bitcoin ETF holds real bitcoin — not futures contracts, not derivatives, not promises about future bitcoin. The fund actually owns the underlying asset. Before January 2024, the only bitcoin-related ETFs approved in the US held bitcoin futures, which track the price less precisely and introduce additional costs. The approval of spot ETFs was the change the market had been waiting for.

What you get with an ETF is price exposure. What you do not get is the bitcoin itself. You cannot withdraw actual bitcoin from an ETF, send it to a wallet, or use it to make payments. You hold shares in a fund. The fund holds the bitcoin.

The Main Products Available Today

In the United States, the three largest spot bitcoin ETFs by assets under management are BlackRock's IBIT, Fidelity's FBTC, and Invesco's BTCO in partnership with Galaxy Digital. BlackRock's IBIT, with over fifty-two billion dollars in assets by mid-2025, is by far the largest. Its annual management fee is 0.25 percent, with a promotional waiver bringing the effective fee to 0.12 percent on the first five billion dollars and the first year of the fund's operation. Fidelity's FBTC runs at 0.25 percent annually and was one of the first to break from the pack with competitive pricing at launch.

If you are reading this from Switzerland, however, there is an important practical point: you cannot buy any of these US-listed products as a Swiss retail investor.

The reason is a piece of European Union regulation called PRIIPS — the Packaged Retail and Insurance-based Investment Products regulation. Under PRIIPS, any packaged investment product sold to retail investors in the EU and EEA must come with a standardised Key Information Document, a specific disclosure format. US-listed ETFs do not produce these documents. Swiss law has adopted equivalent requirements. The result is that Swiss retail investors are blocked from purchasing US-listed ETFs, including IBIT and FBTC, through any regulated Swiss broker or bank. If you have seen BlackRock's IBIT mentioned in the news and wondered why you cannot find it in your Swissquote account, this is why.

The good news is that Europe has its own bitcoin products, several of which have been available for years and trade on regulated European exchanges, including the SIX Swiss Exchange.

The category is technically called ETPs — Exchange-Traded Products — rather than ETFs, because of how European regulation classifies them. They work the same way: you buy shares on a stock exchange, the product holds actual bitcoin, and your investment tracks the bitcoin price. The main European providers are ETC Group, which offers a product called BTCE listed on Xetra (the main German stock exchange); CoinShares, listed across several European venues; and 21Shares, a Swiss-founded company whose products trade on both Xetra and the SIX Swiss Exchange in Zurich.

In Switzerland specifically, 21Shares and Valour both list bitcoin products on the SIX Swiss Exchange. These are regulated Swiss-listed instruments, denominated in Swiss francs, and available through any Swiss broker or bank that offers ETP trading. 21Shares was founded in Zurich, and their products have been trading since 2019 — years before the US approved its first spot bitcoin product. Management fees for European ETPs tend to run higher than the US products, typically in the range of 0.65 to 1.5 percent annually, depending on the product and provider.

How to Buy a Bitcoin ETP in Switzerland

The most direct route is through an online broker. Swissquote, the Swiss online bank and brokerage, offers a range of bitcoin ETPs including 21Shares and Valour products listed on SIX, and some Xetra-listed products as well. Interactive Brokers, which many Swiss investors use for access to international markets, also offers European-listed bitcoin ETPs. DEGIRO, the low-cost European broker with a Swiss client base, lists various Xetra-traded products including BTCE. All of these platforms allow you to search for the ETP by its ticker, place a standard buy order, and settle the trade the same way you would buy a share of Nestlé or UBS.

For Swiss banks, the picture is more varied. UBS and ZKB both offer brokerage services to retail clients and can in principle facilitate ETP trades, though their platforms may have a more limited selection than dedicated online brokers and their transaction costs tend to be higher. PostFinance has expanded its trading offering in recent years, though the specific availability of individual bitcoin ETPs is worth checking directly on their platform before assuming. If you bank with one of these institutions and prefer to keep everything in one place, it is worth logging in and searching for "bitcoin ETP" or looking at the structured products section.

The process in practice: you search for the product by name or ticker, check the product factsheet to confirm it is a physically-backed spot product (not a futures-based product or a leveraged product), note the annual management fee, and place a standard market or limit order. Your bitcoin ETP holding then appears in your portfolio alongside your other investments.

Bitcoin ETPs trade only during stock exchange hours. If you want to buy or sell during a weekend or a public holiday, you wait until markets open. On-chain bitcoin trades continuously, seven days a week. This is a minor difference but worth knowing if you are comparing the experience to using a crypto exchange.

What You Actually Own

When you buy shares in a bitcoin ETP, you own shares in the fund. The fund owns the bitcoin.

You have price exposure to bitcoin. When bitcoin's price rises, the value of your ETP shares rises proportionally. When bitcoin falls, your shares fall. The tracking is close but not always exact, due to management fees and small timing differences.

You have no wallet and no seed phrase. You have no private keys. You have no responsibility for securing the underlying bitcoin. The fund's custodian — typically a regulated financial institution — holds the bitcoin in cold storage.

You cannot withdraw the underlying bitcoin from the fund. If you want actual bitcoin in a wallet, an ETP does not give you that. You would need to sell your ETP shares and buy bitcoin separately on an exchange or through a service like Relai or Bitcoin Suisse.

You carry counterparty risk. The fund is a legal entity managed by a company. If the company managing the fund were to close, face insolvency, or have a custody failure, there are recovery mechanisms — but there is no guarantee equivalent to actually holding your own bitcoin. In practice, major ETP providers are well-capitalised and regulated, and the bitcoin is held in segregated custody separate from the company's operating assets. But the risk exists and is worth understanding.

Annual management fees apply. European bitcoin ETP fees currently run higher than their US equivalents. A fee of 1 percent per year on a ten-year investment costs you roughly 10 percent of your position in fee drag, compounded over time. This is not a reason to avoid ETPs, but it is a reason to compare fees across providers before buying.

In Switzerland, bitcoin ETPs are treated as financial securities for tax purposes, not as direct cryptocurrency holdings. You declare them on your tax return as you would any other security — under Wertschriften. Any realised gains are generally treated as capital gains, which are typically tax-free for private investors in Switzerland. You pay wealth tax on the year-end value. If you receive any distributions (rare for ETPs that do not hold income-producing assets), those are taxed as ordinary income. The tax treatment is more familiar and more straightforward than accounting for direct bitcoin transactions, which is one practical advantage of the ETP structure.

The Trade-offs, Honestly

An ETF or ETP gives you:

— Simplicity. You buy it through an account you already have. You see it in your portfolio. You sell it the same way. No new account, no new password, no unfamiliar interface.

— Familiarity. Your financial advisor can recommend it. It sits in the same portfolio as your equities and bonds. It shows up on a normal broker statement.

— Regulated structure. The fund is regulated. The custodian is regulated. The exchange it trades on is regulated. If something goes wrong, there are legal frameworks that apply.

— No self-custody risk. You cannot lose your bitcoin by forgetting a password or misplacing a seed phrase. The fund manages custody.

What an ETF or ETP does not give you:

— Actual bitcoin. You cannot spend it, send it, or use it as money. You have price exposure, not the asset itself.

— Full sovereignty. Someone else holds your bitcoin on your behalf. You are trusting a company, a custodian, and a regulatory structure.

— Zero cost. The annual management fee compounds over time. Over a decade, fees matter.

The ETP is not a lesser form of bitcoin ownership — it is a different form, suited to different people and different situations. Chapter 7 provides a framework for deciding which path fits your circumstances.

Who ETFs Are For

The bitcoin ETP is the right tool for a specific type of person.

You already have a brokerage account and are comfortable using it. You would rather add bitcoin to your existing portfolio than open an account on a crypto exchange, go through a new KYC process, and learn a new interface. The familiarity matters to you, and that is a reasonable preference.

You have a long time horizon. You are thinking in years, not months. You are not trying to trade around bitcoin's short-term price movements. You want bitcoin exposure as part of a savings strategy or long-term investment thesis.

You are not interested in the technical complexity of self-custody right now. Seed phrases, hardware wallets, and cold storage are not things you want to spend time learning. You want to press a button and have bitcoin exposure. That is valid.

Your financial advisor can now include bitcoin in your portfolio. One of the significant practical effects of regulated ETPs is that Swiss financial advisors — who are fiduciaries and must recommend only regulated products — can now allocate a portion of a client's portfolio to bitcoin without advising them to self-custody. If your relationship is with a wealth manager, an ETP may be the only path through which bitcoin enters your portfolio through that channel.

You hold bitcoin in a pension or investment account where self-custody is not possible. If you invest through a structured savings plan or a pension product that invests in securities, an ETP may be the only mechanism available.

The ETP is not the right tool for someone who wants actual bitcoin they can move, spend, or hold outside the financial system. It is not the right tool for someone whose primary reason for holding bitcoin is protecting against systemic financial risk — because an ETP is itself part of that system. And it is not the right tool for someone whose holding is large enough that annual management fees represent a significant drag on their position over a long horizon.

What to Do This Week

Go to your Swiss broker or bank's platform and search for "bitcoin ETP" or look at the structured products and ETF section.

Check whether the platform lists 21Shares, Valour, ETC Group, or CoinShares bitcoin products. Note the tickers and look at the product factsheets. You are looking for three things: whether the product is physically backed by real bitcoin (not futures), what the annual management fee is, and what exchange it trades on.

Compare fees across the products available on your platform. A difference of 0.5 percent annually does not feel significant, but over ten years on a meaningful holding it adds up. Take ten minutes to understand exactly what you are buying — what the fund holds, where it is custodied, and what happens to your position if the fund closes.

If your broker does not offer these products, or if you are not currently using a broker, Swissquote or Interactive Brokers are the most common starting points for Swiss investors seeking access to European-listed bitcoin ETPs.

You do not need to decide right now whether an ETP is better than self-custody. That is the subject of the next chapter. What matters at this stage is that you understand what an ETP is, what it actually gives you, and where to look for the Swiss-accessible options. Once you have that information, you are in a position to make a decision rather than just reacting to the advertising.

Chapter Summary

• In January 2024, the US SEC approved spot bitcoin ETFs, making bitcoin accessible to investors through standard brokerage accounts for the first time. BlackRock's IBIT reached fifty-two billion dollars in assets within a year — the fastest ETF growth in US financial history.

• A bitcoin ETF or ETP holds actual bitcoin on behalf of investors. You buy shares in the fund through a brokerage account. The fund tracks bitcoin's price. You gain price exposure without holding bitcoin directly.

• Swiss retail investors cannot buy US-listed bitcoin ETFs. PRIIPS regulation requires products sold to European retail investors to include standardised disclosure documents that US ETFs do not provide. European bitcoin ETPs, from providers including 21Shares and Valour, are available on the SIX Swiss Exchange and accessible through Swiss brokers including Swissquote and Interactive Brokers.

• With a bitcoin ETP, you have price exposure but no actual bitcoin. You cannot withdraw the underlying asset, make payments with it, or move it off the platform. Annual management fees apply and compound over time.

• ETPs are well-suited to investors with existing brokerage accounts, long time horizons, and no interest in self-custody. They are how financial advisors can now include bitcoin in client portfolios. Chapter 7 addresses how to decide between an ETP and self-custody based on your specific situation.