Fidelity Crypto ETF: How It Works, Pros & Cons, and More

Imagine getting crypto without handling private keys and creating a wallet. The good news is that it’s no longer just an idea, as Fidelity Crypto ETFs make it a reality. So, what is the Fidelity Crypto ETF actually? It’s a regulated, exchange-traded fund that gives you exposure to crypto through your brokerage account.

It’s different from exchanges like Binance or Bybit, where you get flexibility to trade around the clock and access a wider range of tokens. Fidelity ETFs are more about convenience, integrating crypto into a "traditional" investment portfolio without you ever needing to touch a blockchain.

So, if you’re interested in dipping your toes into crypto without diving into the deep end, let’s explore how crypto ETFs by Fidelity work and whether they’re right for you.

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Introduction to Fidelity Crypto ETFs

Fidelity is a massive, privately held financial services firm that operates a full brokerage platform, letting individuals and institutions trade stocks and more. Among its services is Fidelity Crypto ETFs (Exchange-Traded Funds), which offer people a regulated and accessible way to get crypto exposure without directly owning the coins.

ETFs essentially provide a diversified portfolio.^[1] These can be set up in different forms, such as trusts or mutual funds. Mutual fund–style ETFs, for instance, trade daily like stocks but still offer broad diversification.

Fidelity, specifically, has over 2500 commission-free ETFs. It offers ETFs covering all 11 US equity sectors, using MSCI USA Investable Market Indexes. These include companies of varying sizes and are aligned with the Global Industry Classification Standard (GICS).

"Fixed Income ETFs", for example, focus on bonds, including government, corporate, municipal, or securitized bonds. Meanwhile, "Sector ETFs" hold a basket of stocks from companies operating in a certain sector.

Does Fidelity have a crypto ETF? Yes. Crypto-related products fall under "Fidelity Digital Asset Funds". At the time of writing, there are two Fidelity Crypto ETFs:

• The Fidelity Wise Origin Bitcoin Fund (FBTC);
• The Fidelity Ethereum Fund (FETH).

These are structured as spot crypto ETPs (Exchange-Traded Products), directly holding Bitcoin or Ethereum. This means the Fidelity team actually purchases and stores the underlying cryptocurrencies themselves, rather than using futures contracts or other derivatives to mimic the price.

So, how do Fidelity Crypto ETFs work? When you buy FBTC or FETH, Fidelity’s team takes care of everything behind the scenes:

All crypto is held under custody by Fidelity Digital Asset Services, which provides strong institutional-grade security, both physical (like cold storage) and digital safeguards, to protect the assets.

Also, you’re not investing in complicated financial contracts since your ETF shares represent a stake in real Bitcoin or Ether held on your behalf. The ETF shares trade during regular market hours (e.g., 9:30 AM-4 PM ET), just like any other stock or ETF. You get real-time pricing without needing to navigate crypto exchanges.

Fidelity Crypto ETFs: Dive Deeper

There’s more beneath the surface than just easy access. From how they’re structured and regulated to their performance, market share, and trading dynamics, FBTC and FETH have unique traits that you should know.

FBTC

The Fidelity Wise Origin Bitcoin Fund (FBTC) is Fidelity’s spot Bitcoin Exchange-Traded Product. It's designed for people who want direct Bitcoin price exposure without dealing with wallets, keys, or crypto exchanges.

Launched on January 11, 2024, this Crypto ETF Fidelity has been traded on the Cboe BZX exchange. The expense ratio is 0.25% per year, which Fidelity initially waived for the first six months after launch, making the price competitive compared to some other spot Bitcoin ETFs.

In terms of scale, FBTC has grown rapidly, making it the best Fidelity Crypto ETF. It holds over 206,000 BTC as of mid-2025, which is close to 1% of all the Bitcoin that will ever exist, and roughly 9% of the entire spot Bitcoin ETF market.

Big investors seem to like it, too. The number of large, institutional holders has more than doubled between early 2024 and early 2025, even though Bitcoin’s price dipped by about 12% in the first quarter of 2025.

Yes, performance has been in line with Bitcoin itself. As of August 2025, FBTC is up about 24.5% for the year and has delivered a 1-year gain of over 95%. This means that if you had invested $1,000 in FBTC a year ago, it would be worth around $1,950 today.

FETH

Similar to FBTC, the Fidelity Ethereum Fund (FETH) is Fidelity’s solution for people who want to tap into Ethereum’s price movements without dipping into the technical side of crypto ownership. It’s also traded on the Cboe BZX exchange and launched on March 28, 2024.

If FBTC has the Fidelity Bitcoin Reference Rate, FETH is built to follow the Fidelity Ethereum Reference Rate. It’s a benchmark that blends price data from several reputable Ethereum spot markets to create a fair US dollar value.

FETH also holds actual Ethereum in secure custody with Fidelity Digital Asset Services. This setup removes the functions of wallets and private keys while keeping your ETH under institutional-grade security.

Its annual expense ratio is 0.25%, which puts it in the same competitive range as other spot Ethereum ETFs. Performance-wise, as of August 2025, FETH has gained about 20.2% year-to-date and roughly 68% over the past 12 months.

In other words, a $1,000 investment a year ago would now be worth around $1,680. That said, Ethereum is known for its sharp price swings, so these gains could just as easily turn into losses during a downturn.

Interest in FETH has been steadily growing among both individual and institutional investors who see Ethereum as more than "just a cryptocurrency". Its role in powering smart contracts, DeFi, and NFT ecosystems has been appealing to people who believe in its long-term adoption.

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Benefits & Risks of Fidelity Crypto ETFs

Before deciding whether to invest in Fidelity Crypto ETFs, it’s important to understand what you’re getting into. Like any digital assets, FBTC and FETH come with a mix of advantages and drawbacks. Knowing both sides can help you decide if these products align with your financial goals, risk tolerance, and overall portfolio strategy.

First of all, you may be interested in the crypto ETFs by Fidelity for these reasons:

• Crypto exposure without the hassle;
• Diversified assets in one place;
• Institutional-grade security;
• Competitive fees.

Both FBTC and FETH hold the actual cryptocurrencies on your behalf, meaning you don’t deal with private keys, wallets, or crypto exchanges.

Moreover, Fidelity offers more than crypto, as it initially focused on mutual funds before expanding into a full-service brokerage. In this case, you get to buy ETFs through the same brokerage account you already use for stocks and mutual funds.

You can buy and sell shares during normal market hours, see your positions in your brokerage dashboard, and receive standardized statements – all without navigating the crypto-native ecosystem.

All crypto assets in FBTC and FETH are stored with Fidelity Digital Asset Services, a regulated New York state limited-purpose trust company. This setup offers custody and execution services that meet institutional security standards, which is something you wouldn’t necessarily get with a regular crypto wallet or smaller exchange.

Both ETFs have an annual expense ratio of 0.25%, which is on par or even slightly lower than some competing spot crypto ETFs. FBTC even waived its fee for the first six months after launch.

With all these benefits, consider some potential drawbacks:

• Market volatility;
• Single-asset concentration;
• Limited trading hours;
• Market share and liquidity risks.

As cryptocurrencies, Bitcoin and Ethereum are known for their price swings;^[2] a double-digit gain one month can easily turn into a double-digit loss the next. The same applies to FBTC and FETH since they hold the underlying cryptocurrencies directly, and their value moves in line with Bitcoin and Ethereum’s market prices.

Both ETFs are also highly concentrated, focusing entirely on a single cryptocurrency. This is different from broad-based ETFs that spread risk across multiple companies or sectors. While you can, of course, hold other assets in your brokerage account to diversify, FBTC and FETH themselves don’t provide built-in diversification.

Sudden price spikes or drops that happen outside the working hours won’t be reflected until the market reopens, potentially creating gaps between the ETF’s price and the actual crypto market.

Finally, for those thinking the best Fidelity Crypto ETF is FETH, keep in mind that it's newer and has a smaller market share than FBTC, which already holds nearly 1% of all Bitcoin in existence. For large transactions, its liquidity may be more limited compared to established Bitcoin ETFs.

📚 Read More: What is Ethereum?

How to Buy Fidelity Crypto ETFs

Fidelity offers FBTC and FETH via its own brokerage service, and it's also available through other platforms. As I think Robinhood has a smoother flow and more intuitive interface, I’ll show you how to buy Fidelity Crypto ETFs via the Robinhood app instead of Fidelity’s own site.

How to Create and Fund a Robinhood Account

If you’re new to Robinhood, you need to create an account. Don’t worry; the process of setting up and funding your account is straightforward. Here's the guide to get started quickly and safely.

Generally, Robinhood deposits take 3-5 business days to settle. However, it offers instant deposits of up to $1,000, meaning you can start investing right away, even before the funds officially land in your account.

That said, make sure you have the deposit amount available in your bank account. If the transfer fails, it could be reversed, and you might lose access to instant deposits in the future.

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How to Buy Fidelity Crypto ETFs on Robinhood

With Robinhood, you can still buy Fidelity Crypto ETFs with just a few taps. This platform allows you to search for and purchase ETFs the same way you would buy stocks, making it a convenient option for those who already manage their assets there. Once you've created and funded the account, follow these steps:

Once the order is complete, return to the homepage to see the purchase in your account. There should be a direct crypto position, plus shares of the Fidelity Bitcoin ETF. Tapping on FBTC and scrolling down should give you full details about your position and let you track your purchase.

Comparing FBTC With Other Bitcoin ETFs

FBTC can be a solid option for investors seeking institutional-grade custody and integration into the Fidelity ecosystem. However, you may prefer a fund with lower fees, higher liquidity, or a more established market presence. In that case, consider the following alternatives:

Launched by BlackRock in January 2024, IBIT quickly became the largest spot Bitcoin ETF, capturing more than 75% of total net inflows, outpacing other options, including FBTC.

It has gathered billions in assets (over $50 billion in AUM) and benefits from tight trading spreads and support for options trading. While custody is handled by Coinbase, IBIT’s massive scale, liquidity, and investor demand make it the go-to choice for active traders.

ARKB is a product collaboration between Cathie Wood’s ARK Invest and 21Shares. It comes with a lighter fee of around 0.21%, thanks to an initial waiver offering that lasts either six months or until the fund reaches $1 billion in assets (whichever happens first).

As of early 2025, ARKB manages roughly $4.3 to $4.9 billion in assets. Though it’s smaller than FBTC or IBIT, it stands out by offering transparency via Chainlink Proof of Reserve. This enables buyers to see the actual Bitcoin backing the fund, which can improve trust in its security.

On the other hand, GBTC is managed and sponsored by Grayscale Investments, LLC. Still, its custody is handled by Coinbase Custody Trust Company, LLC, that keeps the private keys in segregated custody accounts, and Anchorage Digital Bank N.A., which holds a portion of GBTC’s Bitcoin in cold storage.

GBTC was one of the original ways to buy Bitcoin through traditional markets, having been launched back in 2013. However, it's now more costly with a 1.50% annual fee, which is higher than the Fidelity Crypto ETF price and most of today’s newer Bitcoin exchange-traded funds.

In its first year competing against these newer ETFs, GBTC faced hefty withdrawals – about $21 billion flowed out as people shifted their money to lower-cost alternatives. Despite that, GBTC is still holding substantial assets, thanks to its early adopter advantage and legacy status.

Here’s a table to give you a quick overview of the mentioned spot Bitcoin ETFs.

Table: Comparison of FBTC, IBIT, ARKB, and GBTC.

In short, if you value comfort and the reliability of Fidelity, sticking with FBTC can be the right move. Meanwhile, those seeking top-tier liquidity and the fastest trade execution may choose IBIT.

GBTC may still appeal to investors who are already holding it and are comfortable with its legacy structure, despite its higher costs. Meanwhile, ARKB offers a compelling option for fee-conscious investors who are attracted to ARK’s innovative approach.

📚 Read More: Best Crypto ETFs

Regulatory Landscape on ETFs

In the US, all ETFs (including those that focus on cryptocurrency) must follow strict rules set by the Securities and Exchange Commission (SEC). These rules come from laws like the Investment Company Act of 1940 and the Securities Exchange Act of 1934, which aim to protect investors and keep markets fair.

A key update came in 2019 with Rule 6c-11, often called the "ETF Rule". This rule made it easier and faster for qualifying ETFs to launch by removing the need for case-by-case approvals.

Oversight is split between two main SEC divisions:

• The Division of Investment Management looks at how ETFs are built, what they disclose, and whether they meet registration requirements.
• The Division of Trading and Markets keeps an eye on trading activity to make sure markets stay fair and orderly.

Together, they ensure that ETFs are compliant both before and after they start trading. Like "traditional" ETFs, crypto ETF providers must give investors semiannual reports showing performance, holdings, and costs.

They also need to think about limits on risky strategies, such as excessive leverage or holding too many illiquid assets, preventing investors from being blindsided by unexpected risks.

This means, crypto ETFs have fewer built-in protections. That’s why the SEC has introduced new guidance for crypto ETFs in 2025, requiring clear details on how assets are stored, what fees are charged, and the specific risks involved. The goal is to give investors more transparency and confidence when exploring these newer products.

So, what does it mean for common users? For Fidelity Crypto ETF holders (or other crypto ETF holders), these regulations mean you’re not stepping into a completely uncharted area when buying a crypto ETF.

The SEC’s oversight helps ensure that the products you’re buying are built on clear rules, transparent reporting, and fair trading practices. Still, it’s not a free pass to skip due diligence. Crypto ETFs can still be volatile, carry higher fees, or have unique risks tied to the underlying digital assets.

📚 Read More: US Crypto Regulations

Fidelity's Journey Into Crypto

Founded in 1946 by Edward C. Johnson II, Fidelity began as Fidelity Management & Research, serving as the investment adviser for the Fidelity Fund.

Over the years, the company expanded well beyond mutual funds. Today, it offers a wide range of financial services for US residents, including active and index mutual funds, ETFs, 401(k) and IRA retirement plans, brokerage trading, wealth management, and even crypto custody services.

📚 Read More: Best Bitcoin ETF in the UK

Fidelity’s journey into crypto started around 2014, when the company began mining Bitcoin and experimenting with blockchain technology as part of its initiatives. These early efforts paid off; in 2018, Fidelity officially launched Fidelity Digital Assets®, a dedicated platform providing custody and trading services for digital assets.

The company offers several ways to access the crypto world. The first product is Fidelity Crypto®, which lets US customers trade cryptocurrencies such as Bitcoin, Ethereum, and Litecoin starting from just $1. You can trade 7 days a week, 23 hours a day, inside the same app where you manage your stocks and ETFs.

You're essentially managing your own assets through Fidelity Crypto®, much like on a traditional exchange, but with some added institutional-level security. Also, instead of a listed transaction fee, each time you trade, there's a spread of about 1%.

Then, there are FBTC and FETH. I’ve talked about in this Fidelity Crypto ETF review. With this service, you can get cryptocurrency exposure indirectly by investing in funds designed to mirror the price of a specific digital asset.

Unlike Fidelity Crypto®, which allows you to directly purchase and hold actual cryptocurrencies, FBTC and FETH provide a traditional brokerage-friendly structure that fits within regular investment accounts.

FBTC and FETH are for investors with a high risk tolerance and invest in a single cryptocurrency, which are highly volatile and could become illiquid. Investors could lose their entire investment.

Another service provided is Fidelity Crypto® for IRAs. It gives investors a path to add cryptocurrencies like Bitcoin, Ethereum, and Litecoin to their retirement portfolios, available in Roth, Traditional, and Rollover formats.

Just like with Fidelity Crypto® for retail accounts, trades in Crypto IRAs incur a 1% spread on execution, instead of traditional trading fees.

Last but not least, you can invest in stocks of companies involved in digital assets, either by picking individual firms or through ETFs like the Fidelity® Crypto Industry and Digital Payments ETF (FDIG) and the Fidelity® Metaverse ETF (FMET).

FDIG focuses on companies that support blockchain technology, cryptocurrency infrastructure, and digital payment processing. Meanwhile, FMET invests in firms shaping the Metaverse, including those developing digital content, infrastructure, and wearable tech.

Here’s a tidy comparison table summarizing Fidelity’s crypto offerings:

Table: Comparison of Fidelity's crypto products

Fidelity’s lineup shows that its crypto services go well beyond ETFs, from direct trading to retirement accounts and sector-focused stock investing. These options give you multiple paths to get exposure depending on your risk tolerance, account type, and long-term goals.

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Conclusions

Fidelity Crypto ETFs bridge the gap between digital assets and the familiarity of traditional investing. You won’t get the same trading freedom or variety as you would on crypto exchanges like Binance or Bybit, but you can skip the learning curve, security risks, and wallet management.

Does Fidelity have a crypto ETF provided on another platform? Yes, you can find it on Robinhood – no need to open a Fidelity account. This accessibility makes FBTC and FETH appealing entry points for both cautious newcomers and traditional investors curious about the digital asset space.

The content published on this website is not aimed to give any kind of financial, investment, trading, or any other form of advice. BitDegree.org does not endorse or suggest you to buy, sell or hold any kind of cryptocurrency. Before making financial investment decisions, do consult your financial advisor.

Scientific References

1. Marín-Rodríguez N. J., González-Ruíz J. D., Botero S.: 'Towards New Strategies for Investing: Insights on Sustainable Exchange-Traded Funds (ETFs)';

2. Gherghina S., Constantinescu C.: 'Towards Examining the Volatility of Top Market-Cap Cryptocurrencies Throughout the COVID-19 Outbreak and the Russia–Ukraine War: Empirical Evidence from GARCH-Type Models'.