The true cost of a Bitcoin ETF: Fee ratios and tracking errors

Cryptonews reported that regarding the true cost of Bitcoin ETFs, analysis points out that expense ratios, tracking errors and actual returns of holders are key factors. The fees of Bitcoin ETFs increase with compound interest over time. The analysis covers the trade-offs of fee ratios, tracking errors, tax treatment and self-custody for 11 U.S. spot funds. Despite new headlines every week about the flow of money into Bitcoin ETFs, these numbers obscure a more important question: What are the actual costs of ETFs? Analysis shows that the true cost of an ETF not only includes the expense ratio on the fund specification, but also the compound interest effect over the years, the tracking error between the ETF price and the actual price of Bitcoin, and the difference in tax treatment between ETF shares and directly holding Bitcoin. The current annual expense ratios of the 11 U.S. spot Bitcoin ETFs range from 0.19% to 1.50%. Although the gap does not seem to be large, the actual amounts vary significantly over time.