What Is FBTC?

FBTC is Fidelity’s Bitcoin ETF that lets you invest in Bitcoin through your regular brokerage account without owning crypto directly. It’s the second-largest Bitcoin ETF with $24.4 billion in assets and offers unique in-house custody from a trusted financial giant.

Key Takeaways

• FBTC (Fidelity Wise Origin Bitcoin Fund) is a spot Bitcoin ETF that allows mainstream investors to gain exposure to Bitcoin’s price movement without holding actual Bitcoin.

• FBTC holds real Bitcoin and issues shares backed by these holdings; share prices track Bitcoin’s movements, offering financial benefits without custody hassles.

• Alongside BlackRock’s IBIT and Grayscale’s GBTC, FBTC was approved by the US SEC on January 11, 2024, and has grown to become the second-largest spot Bitcoin ETF by assets under management.

• FBTC’s unique feature is in-house Bitcoin custody – the Bitcoin backing FBTC shares is held by Fidelity Digital Assets, not third-party custodians like most competitors use.

• As of 2024, FBTC holds over 206,000 Bitcoin (approximately 0.98% of total Bitcoin supply) with a 0.25% annual expense ratio, making it competitive with other major Bitcoin ETFs.

• Spot Bitcoin ETFs collectively hold over 6% of Bitcoin’s total supply, representing about $159 billion in mainstream capital flowing into Bitcoin since SEC approval.

Introducing the Fidelity Wise Origin Bitcoin Fund – FBTC

FBTC is the Fidelity Wise Origin Bitcoin Fund – a spot Bitcoin Exchange-Traded Fund (ETF) that allows investors to gain exposure to Bitcoin without directly owning the cryptocurrency. Trading under the ticker “FBTC” on the Cboe BZX Exchange, this fund holds actual Bitcoin and tracks its price movements.

Launched on January 11, 2024, following SEC approval of spot Bitcoin ETFs, FBTC has quickly become the second-largest Bitcoin ETF by assets under management, holding over 206,000 Bitcoin worth approximately $24+ billion. As of July 2025, FBTC accounts for over 9% of the spot Bitcoin ETF market share and represents 0.98% of Bitcoin’s total supply.

Key Facts About FBTC

• Full Name: Fidelity Wise Origin Bitcoin Fund

• Ticker Symbol: FBTC

• Exchange: Cboe BZX Exchange

• Fund Manager: FD Funds Management LLC (Fidelity subsidiary)

• Launch Date: January 11, 2024

• Expense Ratio: 0.25% annually

• Bitcoin Holdings: 206,846 BTC (as of July 2025)

• Daily Trading Volume: ~$300 million average

How FBTC Works

FBTC operates like a traditional ETF but holds Bitcoin instead of stocks. When you buy FBTC shares, you’re purchasing a piece of a fund that owns actual Bitcoin. The share price rises and falls with Bitcoin’s market value.

The Creation and Redemption Process

Large financial institutions called Authorized Participants (APs) keep FBTC’s price aligned with Bitcoin’s value through a sophisticated process:

When demand is high: APs buy Bitcoin and deliver it to Fidelity in exchange for new FBTC shares, which they sell on the market. This increases supply and prevents the ETF from trading above Bitcoin’s value.

When selling pressure is high: APs buy FBTC shares from the market and return them to Fidelity in exchange for Bitcoin. This reduces supply and supports the price.

This mechanism ensures FBTC’s market price stays close to the actual value of its Bitcoin holdings.

Why Choose FBTC Over Other Bitcoin ETFs?

FBTC has its unique set of advantages, most notably its in-house custody solution.

Fidelity’s Unique Advantages

In-House Custody: Unlike most Bitcoin ETFs that use third-party custodians like Coinbase, FBTC stores its Bitcoin with Fidelity Digital Assets, the company’s own regulated subsidiary. This vertical integration provides:

• Direct control over security protocols.

• Single point of accountability.

• Institutional-grade cold storage with multi-layered security.

• Elimination of third-party custody risks.

Proven Track Record: Fidelity has been involved in Bitcoin since 2014, launching Fidelity Digital Assets in 2018 – years before the ETF boom. Key milestones include:

• 2014: Started internal Bitcoin and blockchain research.

• 2018: Launched Fidelity Digital Assets for institutional custody and trading.

• 2022: Enabled Bitcoin options in select 401(k) retirement plans.

• 2024: Introduced Fidelity Crypto for retail Bitcoin, Ethereum, and Litecoin trading.

This decade-long commitment translates to robust infrastructure and deep market expertise, making Fidelity one of the most popular spot Bitcoin ETFs.

High Liquidity: With average daily trading volume of around $300 million, FBTC is among the top three spot Bitcoin ETFs by volume, ensuring easy entry and exit for investors.

Competitive Fees: Fidelity initially waived fees for the first six months, then implemented the competitive 0.25% expense ratio to attract and retain investors.

FBTC vs. Other Spot Bitcoin ETFs

FBTC’s main differentiator is its in-house custody model, which eliminates third-party custody risk while maintaining competitive fees.

Why Fidelity Launched FBTC

Fidelity’s decision to launch FBTC was driven by three strategic factors:

Meeting Overwhelming Market Demand

Bitcoin has been one of the best-performing assets over the past decade, with a market cap exceeding $2.3 trillion – making it the fifth most valuable investment globally, surpassing companies like Meta ($1.8 trillion) and Tesla ($1.02 trillion). However, the Bitcoin market remained largely inaccessible to mainstream investors due to regulatory barriers and technical complexity. FBTC satisfies this pent-up demand by providing a regulated, familiar investment structure.

Strategic Market Positioning

With multiple investment firms entering the Bitcoin space, Fidelity needed to maintain its competitive position. The wave of institutional Bitcoin adoption created a compelling narrative, and launching FBTC ensures Fidelity doesn’t lose market share to competitors like BlackRock’s IBIT.

Exposure to High-Growth Digital Assets

Bitcoin represents one of the fastest-growing asset classes and leads the $3.9 trillion cryptocurrency market. FBTC allows Fidelity to capitalize on this growth while appealing to younger demographics and emerging investment trends.

Benefits of Investing in FBTC

FBTC offers several advantages that improve the accessibility and convenience of investing in Bitcoin for traditional investors.

For Traditional Investors

• Familiar Investment Vehicle: Buy and sell through your regular brokerage account.

• No Crypto Wallet Required: No need to manage private keys or digital wallets.

• Retirement Account Eligible: Can be held in IRAs and 401(k)s.

• Regulated Environment: Full SEC oversight and regulatory compliance.

• Cross-Service Integration: Can be integrated with other Fidelity financial services including savings, tax, and retirement planning.

Financial Advantages

• High Liquidity: $300 million average daily volume ensures easy entry and exit.

• Professional Custody: Battle-tested security from Fidelity Digital Assets with offline cold storage, multi-layered security protocols, and 24/7 on-site protection.

• Tax Simplicity: Treated like stock investments – you are only taxed when you sell.

• Transparent Pricing: Real-time market pricing during trading hours.

• Fractional Shares Available: Many brokers allow fractional FBTC purchases for smaller investments.

Risks to Consider

While FBTC lowers the barrier to entry to invest in Bitcoin, investors must evaluate potential risks before investing.

Bitcoin-Specific Risks

• Extreme Volatility: Bitcoin can experience dramatic price swings.

• 24/7 Market Gaps: Bitcoin trades continuously, but FBTC only during stock market hours, although market makers keep this minimal.

• Regulatory Uncertainty: Evolving cryptocurrency regulations could impact the fund.

ETF-Specific Risks

• Tracking Error: Small differences between FBTC performance and Bitcoin’s actual performance.

• Management Fees: The 0.25% annual fee reduces returns compared to holding Bitcoin directly.

• Custody Concentration: In-house custody means all security responsibility rests with Fidelity – while they have extensive resources, a security breach would be their sole responsibility to manage.

• Limited Trading Hours: Unlike Bitcoin’s 24/7 market, FBTC only trades during stock market hours, potentially creating price gaps at market open.

How to Buy FBTC

Here’s a quick look at how you can buy FBTC.

Step-by-Step Investment Process

1. Open a Brokerage Account: Use any major broker like Fidelity, Schwab, Vanguard, Robinhood, eToro, Firstrade, or Interactive Brokers. Note that some brokers support fractional FBTC shares, which is helpful for smaller investments.

2. Fund Your Account: Deposit money via bank transfer or other available methods.

3. Search for FBTC: Enter the ticker symbol in your broker’s platform and verify transaction details.

4. Place Your Order: Choose between market orders (immediate execution) or limit orders (specific price).

5. Monitor Your Investment: Track performance alongside your other holdings and consider setting take-profit or stop-loss orders at target prices.

Important Note: Some brokers may require setting your investment objective to “Most Aggressive” to trade cryptocurrency ETFs.

Tax Implications

FBTC follows standard ETF tax treatment, making it simpler than holding Bitcoin directly:

Tax Treatment

• No taxes while holding: Only taxed when you sell shares.

• Short-term gains (held ≤ 1 year): Taxed as ordinary income (10%-37%).

• Long-term gains (held > 1 year): Preferential rates of 0%, 15%, or 20%.

• Simple reporting: Gains and losses reported on standard tax forms.

Comparison with Direct Bitcoin Ownership

Is FBTC Right for You?

Find out if FBTC is the right spot Bitcoin ETF for you.

Choose FBTC If You Value:

• Fidelity’s Proven Track Record: Fidelity boasts a decade of Bitcoin involvement since 2014.

• In-House Security Control and Single Point of Accountability: Your Bitcoin is stored by Fidelity Digital Assets rather than third-party custodians like Coinbase used by most competitors.

• Ecosystem Integration: Seamless connection with Fidelity’s $4.9 trillion investment platform, retirement planning, and wealth management services.

• Institutional-Grade Infrastructure: Battle-tested custody with offline cold storage, multi-person authorization, and geographically distributed security.

• High Liquidity Assurance: $300 million daily volume backed by Fidelity’s massive distribution network and client base.

Consider Other Bitcoin ETFs If You:

• Prefer Third-Party Custody: Coinbase Custody offers specialized crypto security expertise.

• Prioritize Lower Fees: Choosing promotional rates that may increase later (some competitors offer temporary fee waivers).

• Want the Largest AUM: BlackRock’s IBIT for has a larger asset base and potentially tighter bid-ask spreads.

• Need Different Broker Access: Your preferred broker doesn’t offer FBTC or has better terms for competing ETFs.

Skip Bitcoin ETFs Entirely If You:

• Want 24/7 trading access to match Bitcoin’s market hours.

• Prefer controlling your own private keys and Bitcoin custody.

• Are comfortable navigating cryptocurrency exchanges directly.

• Want to avoid any management fees (0.25% annually for FBTC).

The Broader Impact of Bitcoin ETFs

The launch of spot Bitcoin ETFs like FBTC represents a watershed moment in cryptocurrency adoption. These products have already driven significant institutional investment, with spot Bitcoin ETFs collectively holding over 6% of Bitcoin’s total supply – approximately $159 billion in mainstream capital that has flowed into Bitcoin since SEC approval in January 2024.

This institutional adoption has created:

• Enhanced Market Liquidity: Billions in new trading volume.

• Price Stabilization: Reduced volatility through institutional participation.

• Mainstream Legitimacy: Recognition of Bitcoin as a legitimate asset class.

• Infrastructure Development: Improved custody, trading, and regulatory frameworks.

The Future of Bitcoin ETFs

As the market matures, expect continued innovation in areas like:

• In-kind redemptions for better tax efficiency (several issuers have filed for approval).

• Additional cryptocurrency ETFs, with other digital assets like Solana (SOL) joining Bitcoin and Ethereum ETFs.

• Potentially lower fees as competition intensifies among providers.

• Enhanced integration with traditional investment portfolios and financial planning tools.

The success of Bitcoin ETFs has paved the way for broader digital asset adoption in traditional finance, with FBTC positioned as a leading product in this transformation.

Conclusion

FBTC offers a compelling way for traditional investors to gain Bitcoin exposure through a trusted, regulated vehicle. Fidelity’s unique in-house custody model, competitive fees, and institutional expertise make it a strong choice among Bitcoin ETFs.

However, like all Bitcoin investments, FBTC carries significant volatility risk and may not be suitable for conservative investors. Always research thoroughly and consider your risk tolerance before investing.

Remember the crypto community’s golden rule: Do Your Own Research (DYOR) and never invest more than you can afford to lose.

This article is for educational purposes only and should not be considered financial advice. Cryptocurrency investments are highly volatile and risky. Always consult with a financial advisor before making investment decisions.