How to buy VanEck Bitcoin Strategy ETF shares

By:

James Knight

James is a lead editor for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets. His ... read more.

Updated: Oct 11, 2022

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An ETF, or exchange-traded fund, is a fund that trades on the stock market and you can buy or sell shares in it at any time. On this page, find out why the arrival of the Bitcoin ETFs has been so important, and compare the different ways to buy the VanEck fund.

Compare the best Bitcoin Strategy trading platforms

To invest in an ETF, you need to sign up with an online stock broker. All of the ETF platforms below offer a beginner-friendly way to invest and you can get started by clicking one of the links in the table. If you aren’t ready for that yet, keep reading to learn more about Bitcoin ETFs.

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How to buy the VanEck Strategy ETF, a step-by-step guide

The process of investing in the Bitcoin Strategy ETF isn’t massively complicated, so don’t worry even if you’re new to ETF investing. These are the steps to follow in order to complete your investment:

1. Choose a broker. You will need to use an online brokerage platform. There are many different options to choose from, each with their own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure.
2. Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally you can expect to have to provide your name, email address, phone number, and some form of photo identification.
3. Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in the VanEck Bitcoin ETF.
4. Place an order for XBTF ETF. Search for the VanEct Bitcoin Strategy ticker symbol (XBTF) and see the current price at which the ETF is trading. If you’re happy with the price, enter the amount of shares you wish to own and place your order.
5. Execute your order. Once you have placed your order, your broker will automatically execute it for you and your shares will be listed in your account. Congratulations, you’ve just invested in a Bitcoin ETF.

Should I invest in the VanEck Bitcoin Strategy ETF?

It’s a simple way to invest in Bitcoin if you don’t want to own the coins themselves. An ETF is an ideal investment tool for beginners because it’s cheap and easy to buy, and using one to get exposure to Bitcoin is a lot simpler than putting your money into cryptocurrency directly.

The way an ETF like this works is that you buy shares in the fund and the manager uses that money to invest in Bitcoin futures contracts. As the price of those contracts rises and falls, so does the value of your share.

This is not the only Bitcoin ETF available. It’s one of a flurry of ETFs that were made available at around the same time. It’s also possible to buy the BITO ETF by Proshares or buy the BTF ETF by Valkyrie. While these funds are virtually identical, they differ in terms of the management fee they charge; this VanEck fund is significantly cheaper than the other two.

How has the ETF performed in recent years?

As the fund is so new, there is hardly any past price performance to take into account. What we can use as a guide is how Bitcoin has performed, and the results there have been very good. From trading below $10,000 per coin in 2020, the price of Bitcoin soared above $50,000 before Easter the following year.

Bitcoin’s success led to a flurry of activity from asset management companies, each looking to release an ETF that could attract the attention of casual investors. After months of trying, the first ETFs, including this VanEck-managed fund, began trading in October 2021.

Other funds like this trade on stock exchanges outside America, most notably in Canada, but the sudden appearance of three major funds on the US stock market sent the Bitcoin price even higher. It went above $60,000 a coin during the week that the ETFs were released.

Is it a good time to buy the VanEck Bitcoin ETF now?

That depends on why you want to invest and how much volatility you’re willing to accept. The Bitcoin price tends to experience rapid rises and falls over short periods of time and an ETF that’s so closely linked to it will go through the same fluctuations. Albeit at a smaller scale, as one share of the ETF is worth much less than one Bitcoin.

If you want exposure to Bitcoin in a way that means you’re protected by the normal rules and regulations of stock market investing, or you don’t have the know-how to get your own cryptocurrency, then an ETF is the best option. However, learning how to buy Bitcoin outright would give you a lot more control and flexibility over your money.

Regardless of the approach you choose to take, it’s important to keep an eye on the latest news affecting Bitcoin. That way, you can decide when is the right time to buy or sell your investment, and get a better feel for the sort of events that have an impact on the price. You can start to do that by reading the analysis below.

Buying, selling and trading Bitcoin Strategy for beginners

What to do before buying shares

You should always take the time to research an ETF fully before investing your money, especially if you haven’t bought shares before. The more knowledge you have, the better your chances of making a wise investment. 

With that in mind, here’s a checklist to run through before you start.

1. Research the company. You should always examine the fundamentals of an investment first. What is a Bitcoin ETF? How does it work? How long has it been running for? What does its recent performance look like? The more you know, the better placed you’ll be to invest in XBTF.
2. Make sure you understand the basics of ETF investing. Before getting involved in the ETF market, make sure you have an understanding of how it works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
3. Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
4. Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
5. Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. 
6. Examine broader market conditions. No asset exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and prices are falling, it’s best to wait it out and invest your money later when the ETF is cheaper. If, however, the market is looking bullish, you’ll want to make your investment quickly to get the maximum benefit from rising ETF prices.

What is the difference between buying, selling, and trading shares?

If you’re new to ETF investing, then it’s important to understand the basics of how to buy, sell, and trade. Here’s a quick run-through of what’s involved in each.

Buying VanEck Bitcoin Strategy

This process involves finding a broker and placing an order for Bitcoin Strategy ETF, as outlined in the steps further up this page. Ideally you want to time your investment when the ETF’s price is low so that you can profit by selling the shares after they increase in value.

Selling VanEck Bitcoin Strategy

When you sell any shares you have bought, you’ll want to do so at a higher price than the one at which you bought to earn a profit. 

When you sell is up to you. You might decide to hold for a long period of time, hoping to benefit from the company growing steadily throughout. Or, if you see that the Bitcoin Strategy ETF is already up a lot compared to the price you bought it and you’ve noticed that the Bitcoin market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the ETF price has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.

Trading VanEck Bitcoin Strategy

Trading is the same process, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.

You can trade Bitcoin Strategy through buying and selling shares, or by trading with CFDs. These allow investors to speculate on ETF prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.

Share dealing vs CFD trading

When it comes to investing in any ETF, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors thinking long term tending to go for share dealing, and those looking for short term gains pursuing a more aggressive trading strategy.

Here’s a quick summary of the two approaches, and the pros and cons of each.

Share dealing 

Share dealing refers to the practice of buying and holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from dividend payments or an increase in the ETF’s price over time.

When investing your money this way, it is important to do thorough fundamental analysis of the company in which you are investing. You can learn more about this process in our long term investing course. Here is a brief summary of the pros and cons of that type of investing strategy.

Pros

• Can build wealth over time to achieve financial goals
• Don’t need to be very reactive to short-term market movements
• ETFs are normally low-risk investments that spread your money across different assets

Cons

• Takes a long time to realise any profits
• Your capital is tied up in ETFs and cannot be used for other investments

CFD Trading 

If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. ETF trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of an ETF without having to take ownership of it. When CFD trading, investors are looking to buy and sell ETFs fast to profit from short-term fluctuations in value.

One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into XBTF shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.

When trading using CFDs, it is key to be skilled at technical analysis and reading ETF price charts. As you’re trading ETFs quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its ETF price will rise and fall minute-by-minute.

Pros

• Can generate fast profits if you read the market right 
• Some platforms allow you to trade with leverage
• Prevents your capital being tied up so you can take advantage of investment opportunities

Cons

• Trading with leverage is risky and can lead to big losses
• Doesn’t necessarily generate growth over the long term

How to choose a broker

With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large these are the aspects you should be considering when selecting a broker:

• Range of ETFs available. The most important thing is that you can actually use the broker to find the shares you’re looking for. Some brokers offer more ETFs than others, and many will allow you to trade other assets, such as cryptocurrency ETFs.
• Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
• Regulation. You should only use regulated brokers. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
• Payment methods available. You might want to fund your trading account using a specific payment method, such as PayPal. Not all brokers accept every payment method, but using our comparisons you can search only the brokers that support the option you’re looking for.
• Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
• Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.