Summary iShares Bitcoin Trust ETF offers the largest, most liquid pure-play Bitcoin exposure with a competitive 0.12% expense ratio. Despite recent crypto volatility and a hold rating, I remain bullish on Bitcoin and view IBIT as a strong diversification tool. IBIT’s NAV growth since inception is 41.15%, but recent performance has been negative due to Bitcoin’s sharp sell-off. IBIT’s risks include high volatility and potential for negative returns, but dollar-cost averaging may mitigate timing risk for long-term bullish investors. Due to the sharp pullback in Bitcoin, IBIT looks attractive for long-term investors trading at a near 14% discount to NAV. Introduction For full transparency, I do not own any crypto assets. But I've always kept an eye on Bitcoin-USD ( BTC-USD ). And I used to share the same sentiment as Warren Buffett regarding crypto. There aren't any numbers associated with crypto. No cash flow, balance sheet, ROI, ROE, earnings growth, NAV growth, or book value to analyze. Investing in crypto is speculative, as one can hope that the next buyer is willing to pay a higher price than what you paid for it. With stocks, share price growth typically follows earnings growth. If earnings grow at a high rate, then it's likely so will the stock, and so on and so forth. Although I remain somewhat hesitant, I do believe that crypto is here to stay and will continue to shape the future. As a result, I have been contemplating adding exposure on the current downturn. Long-term, I'm bullish on Bitcoin despite the high volatility and think that it will continue to make new highs in the coming years. Mainly due to rising demand and continued adoption & integration. And despite my skepticism, I think the sharp pullback in iShares Bitcoin Trust ETF's ( IBIT ) price is a potential buying opportunity for less risk-averse, long-term investors. A Crypto Winter? At the time of writing, Bitcoin sits at $62,700 and has been selling off dramatically . Most know crypto is highly volatile, one of the main reasons I've been reluctant to add exposure to my portfolio. But like any investment, I think the price you pay is one of the most important metrics. And because I believe crypto is here to stay and will go up over time, I believe now may be a good time to dip your toes in it for diversification. To be honest, I don't know how low Bitcoin will go, but I do believe we will see more periods of volatility and a potential drop below $60k. Me, personally, I like to dollar-cost average into all my holdings frequently to manage my expectations during periods of large swings. With crypto, this is essential, as the asset, as I mentioned earlier, is highly volatile. The chart below shows how BTC-USD has performed in the past year, down close to 31%. IBIT, which holds 100% Bitcoin exposure, is down roughly 26% over the same period. Seeking Alpha Since October of 2025, BTC-USD has fallen from its 52-week high above $126,000 to a new 52-week low. As a result, IBIT has also fallen from a 52-week high above $71 to a current price of $36 a share. I do think that crypto will continue to see volatility and slide to new lows. But for the long term, I remain bullish on crypto and think Bitcoin and other assets will see new highs, potentially by the end of 2026 or early 2027. According to CNBC , crypto's sell-off is mainly due to a loss of interest among investors. I believe this could be attributed to the President's announcement of a new Fed chair. The reason being is that there's a likelihood that the new Fed chair will aggressively lower interest rates due to the President's past calls for Jerome Powell to lower them. Inflation, although stubborn, has declined from a high in 2023. And lastly, it's likely that the new chair will be loyal to the President's demands. As a result, this could lead to higher stock market gains as rates on fixed-rate investments decline. And this could lead to a rotation from crypto and other alternative investments that are seen as hedges against inflation. Although retail investors are selling, institutions are still buying BTC-USD, according to State Street ( STT ). This is due to suspected long-term growth, diversification, and further regulatory approvals. Additionally, if you remain bullish on BTC-USD like I am and think it will continue to evolve and see more adoption going forward, then IBIT may be the best pure-play. Why IBIT iShares Bitcoin Trust ETF is an ETF created for investors looking for direct exposure to Bitcoin. The fund doesn't pay a dividend, which may surprise some investors as to why I'm even writing about them, as I typically only focus on income-producing assets. But as I mentioned in a previous article, I've become more open to owning non-dividend-paying stocks. In the past month or so, I've started a position in Netflix ( NFLX ). IBIT's inception date is January 5, 2024. Currently, they are the largest spot Bitcoin ETF, with close to $65 billion in assets under management. Although I don't put a lot of emphasis on size, larger funds typically mean better liquidity, higher volumes, lower fees, and swifter execution on trades. As mentioned earlier, IBIT has only 1 holding in its portfolio, and that's BTC-USD. IBIT This is unlike your traditional or covered call ETFs that hold other equities or treasuries to generate additional income. Moreover, covered call ETFs typically outperform in flat or volatile markets due to their options premiums generated. IBIT is designed to outperform during Bitcoin bull markets and should be held strictly for diversification & growth purposes. Something I like about IBIT, besides it being the largest pure-play Bitcoin ETF, is that they have a very reasonable expense ratio at 0.12%. This is lower than the second-largest Bitcoin ETF and peer, Fidelity Wise Origin Bitcoin Fund ETF's ( FBTC ) 0.25%. While I typically look for an expense ratio of 0.10% or lower for passively-managed ETFs, crypto ETFs usually have slightly higher ones. Owning IBIT, you would only pay just $12 for every $10,000 invested. This is significantly lower than some covered call ETFs that offer exposure to crypto. These are usually closer to 1%. Since inception, IBIT has experienced solid NAV growth with a growth rate of 41.15%. Currently, their NAV sits at $41.68. At the current price, this gives investors a near 14% discount to its net asset value. In the past year, NAV growth has been negative due to high amounts of volatility. IBIT fact sheet Because of the high amounts of volatility Bitcoin can experience, this makes IBIT a riskier asset, as negative NAV growth will lead to underperformance. Moreover, if BTC-USD experiences longer periods of volatility, then IBIT could see negative overall returns as NAV growth erodes. Strong Returns Up Until The Sell-Off The chart below shows IBIT's performance vs. the S&P ( SP500 ) from inception until October 1, 2025. The ETF significantly outperformed, up approximately 151% to 43% for the index. Seeking Alpha And going forward, I expect the ETF will see periods of high outperformance and underperformance. But as I previously mentioned, buying at the right price is key. And with sentiment turning negative, now may be the time to pounce. Tax Treatment Because IBIT doesn't pay any distributions, taxes work the same as buying any stock or traditional ETF. According to their prospectus , owners will be treated as if they owned Bitcoin directly. This means buying and holding shares for less than 1 year will subject you to higher taxes since you will be taxed at the short-term capital gains rate. This means you could be subjected to up to 37% in capital gains tax. Holding IBIT for 1 year or longer means you will still be subjected to taxes, but at a more favorable rate depending on your taxed income. Risks & Conclusion IBIT's biggest risk is further amounts of volatility. This could result in negative NAV growth, leading to underperformance. If analysts are correct , then IBIT could potentially drop below their IPO price. According to Polymarket , the bottom is near, as 86% of investors expect it to bottom at $60,000. Investors should be aware that buying crypto assets directly or funds with exposure, you are likely to experience higher amounts of volatility vs. traditional stocks and ETFs. But IBIT's large size, direct Bitcoin exposure, and asset manager in BlackRock ( BLK ) give the fund advantages over peers. Furthermore, their expense ratio is low, making their cost of ownership very reasonable. Although a risky bet, if you're looking for direct exposure to BTC-USD and remain bullish, then consider dollar-cost averaging into IBIT.
