Bitcoin ETFs let a company gain exposure to the Bitcoin price by buying fund shares through an ordinary brokerage account. Holding Bitcoin directly means the company owns the asset itself, held with a custodian or under its own keys. Both are legitimate routes; they differ in control, cost, settlement and accounting.
The question for a CFO is not which is better in general. It is which route fits the company's mandate, size and governance.
What Bitcoin ETFs are
An exchange-traded fund holds an asset and issues shares that trade on a stock exchange. A spot Bitcoin ETF holds actual Bitcoin, held by a custodian appointed by the fund.
In the United States, the SEC approved the first spot Bitcoin ETFs on 10 January 2024. Products in other markets, including Canada and parts of Europe, existed earlier in various forms.
When a company buys Bitcoin ETFs, it owns shares in a fund. It does not own Bitcoin, cannot withdraw Bitcoin, and relies on the fund's sponsor, custodian and authorised participants to track the price.
What direct holding means
With direct holding, the company buys Bitcoin through a broker or OTC desk and settles it into custody it controls or has contracted for. Options include:
- A regulated third-party custodian holding assets in the company's name.
- A multi-signature arrangement in which the company holds some or all of the keys.
- A combination, with keys split between the company and one or more providers.
The company owns the asset outright. It can move it at any hour, use it as collateral where permitted, or transfer it without selling. See corporate Bitcoin custody: the options explained.
Bitcoin ETFs vs direct holding: the comparison
| Factor | Spot Bitcoin ETF | Direct holding |
|---|---|---|
| What you own | Fund shares | Bitcoin |
| Access | Existing brokerage account | Onboarding with broker and custodian |
| Trading hours | Exchange hours only | 24/7 |
| Ongoing cost | Annual management fee | Custody fees, plus execution spreads |
| Custody decisions | Made by the fund | Made by the company |
| Transfer of the asset | Not possible; sell shares | Possible at any time |
| Counterparties | Sponsor, custodian, broker, exchange | Broker or OTC desk, custodian |
| Board familiarity | High | Lower; requires education |
Neither column is free of risk. ETFs concentrate operational risk in the fund's structure. Direct holding places it with the company and its chosen providers.
When Bitcoin ETFs may fit
ETFs tend to suit companies that:
- Want price exposure without operating custody.
- Hold a small allocation relative to their total treasury.
- Already have investment policies that permit listed funds.
- Value familiar reporting from an existing broker.
- Expect to trade only during market hours.
For some boards, an ETF is a sensible first step. It allows the company to observe volatility and reporting before deciding whether to hold the asset itself.
When direct holding may fit
Direct holding tends to suit companies that:
- Intend to hold a material position for many years, where annual fees compound.
- Want the ability to settle, transfer or move assets outside market hours.
- See ownership of the asset itself as part of their strategy.
- Prefer to choose their own custodian and control signing policies.
- Operate in jurisdictions or entities where listed US funds are not easily accessible.
Direct holding requires more upfront work: a treasury policy, custody design, key management and counterparty selection. Our step-by-step guide to how companies buy Bitcoin sets out the process.
Accounting and reporting differences
The accounting can differ meaningfully between the two routes.
- Direct holding under US GAAP. ASU 2023-08 requires in-scope holdings to be measured at fair value, with changes through net income, for fiscal years beginning after 15 December 2024. Early adoption was permitted. It also requires separate presentation and specific disclosures.
- Direct holding under IFRS. Following the IFRIC agenda decision of June 2019, holdings are generally intangible assets under IAS 38, or inventory under IAS 2 if held for sale in the ordinary course of business.
- ETF shares. These are generally treated as investments in a fund rather than as Bitcoin, which places them under different standards.
The classification affects earnings volatility, disclosures and audit work. Companies should take their own accounting, tax and legal advice before choosing a route. Our explainer on ASU 2023-08 covers the US rules in detail.
CFO tip: compare the two routes over your intended holding period, not one year. Add management fees, custody fees, execution costs and internal control costs, then present the board with the full figure for each.
Questions to put to the board
- Is the aim price exposure, or ownership of the asset?
- How long do we expect to hold the position?
- Do we need to move or settle the asset outside market hours?
- Who should make custody decisions: a fund sponsor or the company?
- How comfortable are we operating key management controls?
The answers usually point clearly to one route. Some companies use both, holding a core position directly and a smaller, more liquid sleeve in ETFs.
How The Bitcoin World helps
We help finance teams compare ETFs and direct holding against their own mandate, and present the trade-offs to the board in plain terms. Where a company chooses direct holding, we design the custody architecture and execution plan. Execution, custody and settlement are performed by licensed third-party institutions.