Gold and bitcoin ETFs are different tools that facilitate access to assets, solve various investment challenges, and have their own unique risks.
How a Gold ETF works?
A Gold ETF tracks the spot price of gold through holdings at a custodian. Investors do not own physical gold but shares of the fund. Although the expense ratios are relatively low, at 0.25% to 0.40%, they can accumulate significantly over a long holding period.
How a Bitcoin ETF works?
A Bitcoin ETF holds or tracks Bitcoin, making it accessible for trading on stock exchanges. Fees are generally higher than gold funds, ranging from 0.75% to 1.25%, and Bitcoin prices can fluctuate significantly based on news and market sentiment.
Who should pick what and when?
Investors prioritizing capital preservation and inflation hedging might opt for a Gold ETF. Those looking for higher returns and who can tolerate risks may prefer a Bitcoin ETF, while being mindful of its volatility and associated fees.
Gold ETFs provide a stable hedge, whereas Bitcoin ETFs open the door to high-risk investments with substantial potential returns. The choice between them depends on individual investment goals and strategies.
