This FAQ covers everything you need to know about Fidelity's bitcoin offerings, including its Bitcoin ETF, retirement accounts, and trading services. Learn about fees, security, and how Fidelity compares to other providers in the crypto space.

What is Fidelity Bitcoin?

Fidelity Bitcoin refers to the suite of bitcoin-related products and services offered by Fidelity Investments, one of the largest asset managers in the world. These include a spot Bitcoin ETF, bitcoin trading for retail investors, and Bitcoin IRA options.

Fidelity has been a pioneer in bringing bitcoin to mainstream finance. Its Wise Origin Bitcoin Fund (FBTC) is a spot Bitcoin ETF that launched in January 2024, allowing investors to gain exposure to bitcoin through a traditional brokerage account. Fidelity also offers bitcoin custody and trading services to institutional clients.

How to buy Bitcoin through Fidelity?

You can buy bitcoin through Fidelity by opening a brokerage account and purchasing shares of the FBTC ETF, or by using Fidelity's crypto trading platform if you have an eligible account.

For direct bitcoin purchases, Fidelity offers crypto trading for retail customers in the U.S., allowing them to buy and sell bitcoin and other cryptocurrencies through their Fidelity brokerage account. To get started, you must have a Fidelity account and complete the crypto trading agreement. Minimum investment for crypto trading is $1.

Does Fidelity offer a Bitcoin IRA?

Yes, Fidelity offers a Bitcoin IRA through its Fidelity Digital Assets division, allowing investors to hold bitcoin within a tax-advantaged retirement account.

Fidelity's Bitcoin IRA allows you to invest in bitcoin for retirement, with the same tax benefits as a traditional or Roth IRA. You can roll over funds from an existing IRA or 401(k) into a Fidelity IRA that includes bitcoin. This option was launched in 2022, making Fidelity one of the first major financial institutions to offer such a product.

What are the fees for Fidelity's Bitcoin ETF (FBTC)?

Fidelity's Bitcoin ETF (FBTC) charges a sponsor fee of 0.25% per year, which is waived until the end of July 2024.

This fee is competitive compared to other spot Bitcoin ETFs. For example, iShares Bitcoin Trust (IBIT) charges 0.12% initially, but Fidelity's fee is lower than some other compe*****s like Bitwise (0.20% initially but waived for first six months). After the waiver period, FBTC's fee will be 0.25%, which is among the lowest in the industry.

Is Fidelity Bitcoin safe and secure?

Fidelity provides high-level security for bitcoin investments, including institutional-grade custody and insurance, making it one of the safest ways to invest in bitcoin.

Fidelity uses cold storage for the vast majority of digital assets held on its platform. It also offers multi-layer security protocols and has experience as a custodian for traditional assets. For FBTC, the bitcoin is held by Fidelity Digital Assets, which is a regulated New York trust company. However, like any investment, bitcoin's price volatility remains a risk.

What is the difference between Fidelity and Coinbase for buying bitcoin?

Fidelity and Coinbase both allow you to buy bitcoin, but they differ in account integration, fees, and target audience.

  • Account integration: Fidelity lets you buy bitcoin directly from your existing brokerage account, while Coinbase is a dedicated crypto exchange.
  • Fees: Fidelity charges a spread of about 1% for crypto trades, while Coinbase charges a spread plus a fee based on trading volume (up to 0.6% for standard traders).
  • Use case: Fidelity is better for investors who want to manage all assets in one place, while Coinbase offers a wider range of cryptocurrencies and advanced trading tools.

Can you hold Bitcoin in a Fidelity 401(k)?

Yes, Fidelity allows 401(k) plan sponsors to offer bitcoin as an investment option, with the first such offering launched in 2022.

Fidelity's digital assets account for 401(k) plans lets employees allocate a portion of their retirement savings to bitcoin. This was a groundbreaking move, as Fidelity was the first major 401(k) provider to offer direct bitcoin investments. However, participation is at the discretion of the employer, and there are limits on the percentage that can be allocated to bitcoin.

What are the pros and cons of investing in Fidelity Bitcoin ETF?

The Fidelity Bitcoin ETF (FBTC) offers convenient exposure to bitcoin, but it also carries risks and costs.

Pros:

  • Easy to buy through any brokerage account
  • Low expense ratio (0.25%)
  • Regulated and secure custody
  • No need to manage private keys

Cons:

  • Bitcoin price volatility
  • Ongoing management fee
  • Not direct ownership of bitcoin
  • Potential premium/discount to NAV

Final Thoughts

Fidelity has become a major player in the bitcoin space, offering a range of products from spot ETFs to retirement accounts. Its commitment to security and regulatory compliance makes it a trustworthy choice for traditional investors looking to add bitcoin to their portfolio.

Whether you are a beginner or an experienced investor, Fidelity provides accessible ways to invest in bitcoin. However, always consider the risks and do your own research before investing.