Compare the best Bitcoin trusts
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This guide compares all the best Bitcoin trusts and explains how to choose between them. Find out what you should look out for and get your key questions answered right here.
What are the top Bitcoin trusts?
The trusts in the table below are the best ones around today. There aren’t very many because trusts have to be approved by financial regulators and the process has been slow for any that start purchasing Bitcoin. Check back regularly to find the most up to date information but for now here are the best trusts available.
|#||Trust name||Get started|
|1||Grayscale Bitcoin Trust||Invest now >|
What is a Bitcoin trust?
A trust is an investment vehicle that pools together money from lots of different people. It then uses that money to invest in a variety of assets with the aim of generating a return for everyone involved. In this case, that asset is the cryptocurrency itself, although it could include shares in companies that operate in the Bitcoin market.
Trusts operate a bit like a normal company. It trades on the stock market and you can buy or sell shares in it as you would any other business. The total number of shares available is fixed, and the price of them fluctuates in response to supply and demand.
What should I look for in a trust?
There are lots of factors to consider, and what’s best for you depends on how long you want to tie your money up for and the sort of returns you want to see. These are the most important things to look out for to get the best value for money.
Low maintenance fees
You should expect to pay some form of ongoing charge for the maintenance of the trust. The good thing is that trusts are cheaper to run than funds and usually charge less as a result. The exact charges vary but you should be looking at no more than 0.5% annually. It’s worth shopping about because even a small difference in fees can add up over time.
Net asset value
Trusts trade on the stock market and the price is determined by the number of buyers versus sellers. That means its share price can be different to the value of its holdings, known as the ‘net asset value’. For example, the trust might hold $1000 worth of Bitcoin, but its shares might trade at $800. That would represent a $200 discount to net asset value.
This can work both ways, and the trust can sometimes be trading at a premium as well. In a best case scenario, you should get shares while they’re trading at below the net asset value
A history of good performance
You want to be sure that you can rely on the trust’s management to make best use of your money. While past performance is no guarantee of future success, by comparing one trust to another and – in particular – to the market as a whole, you can get a good idea of whether it’s on the right track.
Ideally a trust holds a number of different assets to reduce your overall risk. For a Bitcoin trust that’s more difficult, but you might want to consider one that holds shares in some of the best blockchain companies as well. That way, your investment isn’t reliant on the performance of the coin alone.
Quick answers to key questions
Do I have to pay to use a trust?
Yes, there is normally an ongoing annual charge. You might also have to pay a fee or commission to your broker when you buy shares in the trust.
What’s the difference between a trust and a fund?
The main difference is that a trust is ‘closed-ended’, so the total amount of money is fixed and the only way to gain access is to buy shares in it from someone else. A fund is ‘open-ended’, where an investor can add or withdraw their money at any time.
Trusts can be a bit more stable than funds as a result. They don’t have to constantly buy or sell assets in response to investors joining or leaving the fund, which makes them cheaper, and they can take a longer term view.
However, the value of a trust’s shares don’t always reflect the value of the assets they own. If there’s more buyers than people willing to sell their stake in it, it’s likely to trade at a premium. A fund, meanwhile, charges a unit price that always represents the value of its holdings.
Can trusts hold other coins as well as Bitcoin?
Yes, in theory, although Bitcoin is the dominant cryptocurrency at the moment and accordingly to this 2022 BTC prediction article, its dominancy will remain relevant. However in the future, there are likely to be trusts that hold a range of cryptocurrencies. The best way to get exposure to more coins right now is to find a trust (or a fund) that holds a mix of assets that includes Bitcoin along with shares in companies that work in cryptocurrency.
Are crypto trusts safe to use?
Yes, they have to be approved by financial regulators to be able to operate and abide by the same rules as any other trust on the market. If you use a regulated broker to get one, they are extremely safe. The only thing to note is that a trust that holds Bitcoin exclusively might be a volatile investment as it would rise and fall in value in response to the Bitcoin price alone.
Should I use a cryptocurrency trust?
If you’re looking for a way to invest in Bitcoin without having to learn how to use a crypto exchange. Trusts are often a good choice if you don’t want to have to manage your own portfolio and just want a low-risk way to build wealth over time.
Cryptocurrency trusts are a little different, as there aren’t many of them and the ones that do exist can be volatile. If you’re interested in a trust but want to wait until more are available, bookmark this page to be the first to know as soon as a new one comes onto the market.
To sum up the pros and cons of using a trust, we’ve pulled together all the most important points into the table below. Use these to help you come to a final decision.
- A way to get exposure to Bitcoin without needing to own cryptocurrency yourself
- Trusts are often cheaper and perform better than funds
- They’re very simple to use, as you can just buy or sell shares through your broker
Alternative ways to invest
As your options are limited when it comes to a trust, you might want to consider alternative ways to invest in Bitcoin. The easiest one is to simply buy the coins directly, which you can do through a broker. The brokers below are all excellent, beginner-friendly platforms that you can use to get your hands on Bitcoin.
Where do I go now?
To invest in a trust straight away, pick one of the options from the table at the top of this page to get started. Otherwise, you can learn more about how Bitcoin works, or how to invest in other cryptocurrencies, first before you dive in.
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