You buy a Bitcoin ETF. The company behind it collapses.
Does your Bitcoin disappear with it?
Usually, the situation is more complicated, and potentially less frightening, than investors might assume.
The first thing to understand is that buying a spot Bitcoin ETF does not mean handing money to an asset manager and receiving Bitcoin owned by that company.
Take BlackRock’s IBIT as an example. Its SEC-filed prospectus says the ETF is structured as a separate Delaware statutory trust. Its assets consist primarily of Bitcoin held by custodians on behalf of the trust, while investors own shares representing fractional beneficial interests in the trust’s net assets.
That separation matters.
Your Bitcoin ETF Isn’t BlackRock’s Bitcoin
Suppose the…