IBIT vs FBTC: Comparing Top Spot Bitcoin ETFs Side by Side

Bitcoin ETFs have shaken up how people can invest in cryptocurrency. Since their approval in 2024, two funds have really stood out: the iShares Bitcoin Trust (IBIT) from BlackRock and the Fidelity Wise Origin Bitcoin Fund (FBTC) from Fidelity. Both follow Bitcoin’s price, but they’ve got some key differences that matter if you’re thinking about where to put your money.

Two futuristic glowing cryptocurrency tokens floating above platforms with a flowing energy wave between them in a dark tech-inspired background.

IBIT gives you almost the same Bitcoin exposure as FBTC but at a lower fee—0.12% versus FBTC’s 0.25%. On the flip side, FBTC lets you tap into self-custody through Fidelity Digital Assets, while IBIT sticks with a third-party (Coinbase) for custody. These details, plus differences in liquidity and how much big institutions trust each, could sway your decision if you’re weighing long-term returns and security.

Core Differences Between IBIT and FBTC

IBIT and FBTC mainly split on how they store Bitcoin, their fees, and which types of investors they attract. BlackRock’s IBIT costs less, but Fidelity’s FBTC focuses on self-custody for security-minded folks.

Custody Structures and Security

The biggest split between these two spot Bitcoin ETFs? How they keep your Bitcoin safe. FBTC uses self-custody with Fidelity Digital Assets, so Fidelity itself controls the Bitcoin directly.

IBIT, on the other hand, relies on third-party custody via Coinbase Prime. That’s actually pretty common for Bitcoin ETFs right now.

Self-custody means FBTC holds the private keys and manages security in-house. That could mean less counterparty risk—no outside custodian in the mix.

With third-party custody, IBIT depends on Coinbase’s security. Coinbase Prime has a solid reputation, but adding another company to the chain introduces a bit more risk. If something goes wrong with Coinbase, IBIT investors could feel it.

Fidelity’s not new to this space. They started looking into digital assets back in 2014, so they’ve got a decade of experience under their belt. That might calm some nerves for investors worried about security.

Expense Ratios and Fee Considerations

IBIT’s 0.12% expense ratio undercuts FBTC’s 0.25%. That 0.13% gap might not sound like much, but it adds up.

Let’s say you put $10,000 into each: IBIT costs you $12 a year, FBTC takes $25. Scale that up to $100,000 and IBIT saves you $130 annually.

Compared to old-school mutual funds (which often charge 1%+), these fees are a bargain. If you’re laser-focused on cost, IBIT probably looks better. Still, some investors are okay paying a bit more for FBTC’s self-custody peace of mind.

Liquidity and Institutional Appeal

IBIT blows FBTC out of the water on liquidity, with $48.8 billion in assets under management. FBTC’s got $16.6 billion.

More assets usually mean tighter spreads and higher trading volume. IBIT’s shares move faster and with less slippage, so it’s easier to jump in or out quickly.

Institutions seem to flock to IBIT. BlackRock manages a whopping $11.6 trillion worldwide and has deep connections with big investors. That’s a tough network to beat.

Fidelity, with $5.8 trillion under management, leans more toward retail investors. They’re still a giant, but BlackRock’s reach with institutions is just bigger.

If you’re trading a lot, IBIT’s higher volume and tighter spreads save you money. For long-term holders, FBTC’s lower liquidity probably isn’t a dealbreaker.

Market Position, Performance, and Alternatives

Since launching in January 2024, IBIT and FBTC have carved out big chunks of the Bitcoin ETF market. FBTC’s year-to-date returns sit a bit higher at 24.9%, but IBIT rules the roost in trading volume and overall presence.

Assets Under Management and Trading Volume

IBIT’s bigger size and name recognition pull in more institutional money. BlackRock’s asset management reputation helps a lot here.

That scale means better liquidity and, usually, lower trading costs. Bigger funds can keep prices more stable when things get hectic.

FBTC still holds its own as the third-largest spot Bitcoin ETF. Investors have poured in plenty of money since it launched.

IBIT just sees more action day to day. That’s a real plus for folks who want to move in and out quickly.

Historical and Recent Performance

FBTC logged 24.9% year-to-date returns recently, along with $307 million in new inflows.

Both ETFs hit the market at the same time in January 2024 and have basically moved in lockstep—up over 32% since launch, right alongside Bitcoin itself.

Any performance gap between the two is tiny. Fees and tracking efficiency have more impact than strategy, since both just mirror Bitcoin’s price.

Comparison With Other Leading Bitcoin ETFs

IBIT and FBTC both beat out GBTC on liquidity. JPMorgan analysts point out that these two have the edge in the Hui-Heubel ratio and other liquidity stats.

GBTC’s higher fees make it less attractive for long-term holders. That’s probably why IBIT and FBTC have grabbed more market share lately.

Franklin Templeton has a Bitcoin ETF in the mix, too, but it hasn’t caught up to IBIT or FBTC in terms of assets or trading volume.

With so many spot Bitcoin ETFs battling it out on fees and features, IBIT and FBTC have clearly pulled ahead since their debut.

Frequently Asked Questions (FAQs)

Both Bitcoin ETFs have a 0.25% annual fee and closely follow Bitcoin’s price. IBIT stands out for higher trading volume and tighter spreads, while FBTC is integrated into Fidelity’s retirement accounts and uses Fidelity’s own custody.

What are the differences between a Bitcoin ETF and an iBIT?

IBIT is BlackRock’s specific Bitcoin ETF. Bitcoin ETFs in general are funds that hold real Bitcoin and trade on stock exchanges like any other stock.

IBIT stands for iShares Bitcoin Trust ETF. It launched in January 2024 and has grown to over $87 billion in assets.

Other Bitcoin ETFs include FBTC and several smaller players. They all work similarly, but fees, custody, and trading volume vary.

Can you explain the tax implications of investing in FBTC compared to iBIT?

Tax-wise, FBTC and IBIT are the same—they’re both grantor trusts. When you sell shares, you get a Form 1099-B for capital gains or losses.

The ETFs themselves don’t pay out taxable distributions. You only owe taxes if you sell your ETF shares for a profit.

You can hold either ETF in tax-advantaged accounts like IRAs or 401(k)s. FBTC might be easier to buy inside a Fidelity retirement account.

What are the relative advantages of using iBIT over a direct Bitcoin purchase?

IBIT skips the headache of managing wallets or private keys. You just use your regular brokerage account—no need to learn crypto exchanges.

The ETF gives you regulated Bitcoin exposure, with Coinbase Prime handling custody. You can trade during market hours and keep everything in your existing portfolio.

IBIT’s liquidity is tough to beat, with billions traded daily. The 0.25% annual fee covers security and removes the technical risks of holding Bitcoin yourself.

How does FBTC's performance compare to a Bitcoin Index Trust like iBIT?

FBTC and IBIT have tracked Bitcoin almost identically since launch. Both have returned around 82% from launch through mid-2025.

The difference in performance is usually less than 0.3%. Tracking error is minimal for both, so you’re getting nearly the same ride as Bitcoin itself.

What liquidity considerations should investors be aware of when choosing between IBIT and FBTC?

IBIT trades over $2 billion daily, while FBTC sees $300–500 million most days.

IBIT’s bid-ask spread averages 0.02%, compared to 0.04% for FBTC. That means IBIT is a bit cheaper to trade, especially for big orders.

If you’re an active trader or institution, IBIT’s deep liquidity is a big plus. For long-term investors, both ETFs are liquid enough for buy-and-hold strategies.

Could you outline the security features of FBTC in relation to those offered by iBIT?

FBTC puts Bitcoin custody in the hands of Fidelity Digital Assets, locking coins away in Fidelity’s own secure vaults. That way, everything stays inside Fidelity’s financial ecosystem, which some folks might find reassuring—if you already trust them with your money, why not your Bitcoin too?

On the other side, IBIT partners with Coinbase Prime for custody. Coinbase Prime brings institutional security, insurance, and keeps assets separated. They’ve built their reputation around crypto, so if you’re more comfortable with a company that lives and breathes digital assets, that’s a draw.

Both options use cold storage and meet regulatory requirements. It really comes down to whether you’d rather stick with Fidelity’s in-house system or trust Coinbase’s crypto-focused approach.