Should You Buy Bitcoin or a Bitcoin ETF? Fees, Taxes and Custody Compared

Buying Bitcoin directly and buying a Bitcoin ETF both track the same price, yet fees, taxes, and custody rules create a surprisingly wide gap between the two that catches most investors off guard.

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When deciding between buying Bitcoin (CRYPTO:BTC) directly or investing in a Bitcoin ETF, it’s important to look at how they compare in terms of fees, taxes, and custody. While both options provide similar exposure to Bitcoin’s price, the choice depends on your individual needs and preferences.

As of September 27, 2026, the price of Bitcoin is around $85,000. Over the past year, Bitcoin has dropped 23.2%, and the Fidelity Wise Origin Bitcoin Fund (CBOE: FBTC), one of the largest Bitcoin ETFs, has fallen 23.4%. Although the difference in decline is slight, understanding the underlying factors that affect fees, custody, and taxes is crucial for making an informed decision.

FBTC Charges 0.25% a Year, and Direct Bitcoin Trades on Weekends

FBTC has an expense ratio of 0.25% per year. This means that for a $10,000 investment, you’d pay $25 annually in fees. Over two decades, this could add up to about $490 at a consistent price. Surprisingly, many investors don’t realize they’re paying these fees—only 45% of ETF and mutual fund owners report paying them, according to a FINRA Investor Education Foundation survey.