FBTC ETF Trading Guide: Fidelity Wise Origin Bitcoin

One way to get exposure to the most traded cryptocurrency is through the Fidelity Wise Origin Bitcoin (FBTC), which allows you to trade the cryptocurrency with a Bitcoin ETF. Let's take a closer look at how you can use this Exchange-Traded Fund (ETF) to trade Bitcoin (BTCUSD) with CFDs on Plus500.

TL;DR

• The Fidelity Wise Origin Bitcoin (FBTC) Fund aims to track the price of Bitcoin.
• The performance of the Fidelity Wise Origin Bitcoin ETF is influenced by the same factors that drive Bitcoin's price, including Bitcoin halving events, adoption rates, Bitcoin mining costs, competition, and regulatory developments.
• Plus500 allows you to trade CFDs on ETFs.
• When trading Contracts For Difference (CFDs) on Fidelity Wise Origin Bitcoin ETF on the Plus500 trading platform, you can speculate on the short-term price movements of Bitcoin without owning the cryptocurrency directly with active trading styles.

What Is the Fidelity Wise Origin Bitcoin (FBTC)?

The Fidelity Wise Origin Bitcoin (FBTC) is an ETF offered by Fidelity (FIS) which is traded on the Cboe BZX Exchange, Inc. The fund is designed to track the price of Bitcoin in US Dollars (USD), the largest cryptocurrency by market capitalisation, as represented by the Fidelity Bitcoin Reference Rate index.

Unlike other Bitcoin ETFs that invest in futures, FBTC directly holds Bitcoin itself. Fidelity Digital Assets, a division of Fidelity Investments, securely stores the Bitcoin backing the FBTC fund, providing investors with added confidence in the safety and security of their investment.

What Are Bitcoin ETFs?

A Bitcoin ETF can be compared to a basket of investments that tracks the price of Bitcoin.

Trading ETFs on Bitcoin can be as convenient as buying shares of a company when you're trading stocks, but instead of owning a piece of a business, you're owning a piece of Bitcoin's value. You can buy, sell and trade Bitcoin through ETFs to trade on bullish and bearish movements whenever possible.

Bitcoin ETFs can invest in either Bitcoin futures contracts or directly in Bitcoin itself. Either way, the goal of this financial derivative is to provide traders with a way to trade Bitcoin without owning the cryptocurrency directly.

Other Bitcoin ETFs than Fidelity Wise Origin Bitcoin

A significant cryptocurrency industry milestone was reached on January 10, 2024. The U.S. Securities and Exchange Commission (SEC) gave its approval to 11 proposals for spot Bitcoin ETFs. This marked a turning point, as it opened the door for traders to gain exposure to Bitcoin through traditional investment vehicles.

With Plus500, you can trade a variety of Bitcoin ETF CFDs, such as:

• Ark 21Shares Bitcoin ETF (ARKB)
• Bitwise Bitcoin ETF (BITB)
• Franklin Bitcoin ETF (EZBC)
• Grayscale Bitcoin Trust (GBTC)
• Hashdex Bitcoin ETF (DEFI)
• Invesco Galaxy Bitcoin ETF (BTCO)
• iShares Bitcoin Trust (IBIT)
• Valkyrie Bitcoin (BRRR)
• VanEck Bitcoin Trust (HODL)
• WisdomTree Bitcoin Trust (BTCW)

Price Drivers of the Fidelity Wise Origin Bitcoin (FBTC)

In trying to understand how the Fidelity Wise Origin Bitcoin ETF will perform, traders should learn the factors that drive Bitcoin's price:

• Bitcoin Adoption: Widespread adoption as a currency is essential to support Bitcoin's value.
• Other cryptocurrencies: Rival cryptocurrencies challenge Bitcoin's dominance, potentially affecting its value, especially Ethereum (ETHUSD) that is the second largest cryptocurrency.
• Mining: Changes in mining difficulty and hash rates directly influence Bitcoin's price.
• Halving Events: The reduction of new Bitcoin supply through halvings that occurs roughly every 4 years can impact its price, as it lowers the supply of BTC.
• Macroeconomic Environment: Like with other asset classes, such as stocks and indices, global events and economic statistics can affect Bitcoin's price.
• Crypto Regulation: Stricter or looser regulations on Bitcoin and cryptocurrencies can influence Bitcoin's use and value.
• Market Sentiment: Trading psychology as well as economic and market insights can drive Bitcoin price fluctuations.

What Are the Advantages of Trading Fidelity Wise Origin Bitcoin?

For less experienced traders, the Fidelity Wise Origin Bitcoin ETF (FBTC) provides a more accessible way to trade Bitcoin. Instead of buying, selling, and securing Bitcoin tokens to gain exposure to Bitcoin, the Fidelity Wise Origin Bitcoin ETF offers an alternative approach to trading Bitcoin.

By trading the FBTC Bitcoin ETF, traders can avoid the security costs and risks associated with holding Bitcoin coins directly. Additionally, the FBTC ETF provides a familiar framework for traders accustomed to stock exchanges.

The ETF also allows professional traders to incorporate Bitcoin into their existing strategies, providing an option to integrate the cryptocurrency into their portfolios.

Fidelity is also a well-known American issuer that has been researching digital assets since 2014, which may strengthen trader confidence in the security, transparency, and reliability of the FBTC ETF.

With CFD providers like Plus500, trading CFDs on the FBTC ETF can allow traders to trade Bitcoin price fluctuations with long and short positions without having to own any share of the FBTC ETF. Being able to gain exposure on both bullish and bearish movements via CFDs on FBTC ETF may be an option for active traders using strategies like day trading and swing trading.

Is it Risky to Trade the Fidelity Wise Origin Bitcoin ETF?

The Fidelity Wise Origin Bitcoin ETF (FBTC) presents an option for trading Bitcoin, but you should also understand the associated risks.

First, unlike Bitcoin itself, which can be traded 24/7, the FBTC ETF is bound by traditional stock exchange trading hours. This limitation may impact trading opportunities.

Additionally, the ETF's performance might not perfectly align with the actual price of Bitcoin due to tracking errors, which may impact your trading expectations and outcomes.

When trading the FBTC ETF, you don't own Bitcoin directly. Instead, your returns depend on the ETF's management and operations. This indirect ownership introduces another layer of risk.

Furthermore, the Bitcoin ETF spot market is relatively new and lacks the robust regulatory framework of traditional financial markets.

As a newly launched ETF (created on 10 January 2024), the Fidelity Wise Origin Bitcoin ETF has a limited track record. With less historical data available, it may be harder to accurately assess its performance and risks to determine whether it fits your trader profile.

Lastly, Bitcoin itself is notoriously volatile, with prices prone to rapid and significant fluctuations. This inherent volatility heightens the risk of losses for traders in the ETF, which means that you should understand how to handle market volatility.

Trading CFDs on the FBTC ETF through a provider like Plus500 relies on leverage. While it can enhance returns, it can also lead to significant losses if the market moves against your position. Additionally, Bitcoin's high volatility can increase the risk of losses for CFD traders.

How to Trade the Fidelity Wise Origin Bitcoin (FBTC) with CFDs on Plus500

1. Determine your trading strategy and risk tolerance.
2. Understand the factors affecting the FBTC ETF's value.
3. Create your Plus500 account.
4. Fund your trading account.
5. Find the FBTC ETF CFD on the trading platform.
6. Set up and open your trading positions on the FBTC ETF CFD (size of your position, type of trading orders to use, stop-loss order, and take-profit order)
7. Monitor your CFD positions on the FBTC.

Ready to start trading the Fidelity Wise Origin Bitcoin ETF with CFDs? Open your CFD account on Plus500 to trade CFDs on FBTC.