BITO Fund Lags Behind Spot ETFs in Performance

The BITO fund is often seen as an investment tool for retail investors seeking direct exposure to Bitcoin through a traditional brokerage account. However, according to a recent analysis, this approach may not be the best choice for long-term investors.

Since the launch of spot Bitcoin ETFs, the BITO fund has returned 21.11%, lagging behind the 36.50% return of IBIT. The main reasons cited for this underperformance are the fund's 0.95% fee and its futures-roll exposure, which can be costly in the long run.

Furthermore, the BITO fund's tracking differences should continue to affect its returns compared to lower-cost spot exposure. While it has a trailing yield of 75.49%, this figure is backward-looking and unstable, making it unreliable for investors seeking consistent income.

In contrast, IBIT offers a stronger choice for direct Bitcoin exposure, while BTCI provides a clearer option-income strategy for investors prioritizing monthly cash flow.