More investors want exposure to Bitcoin, but the choices are not always clear. Should you buy Bitcoin directly, choose a Bitcoin ETF, or invest in companies that hold Bitcoin on their balance sheet?

Each option works differently and comes with unique benefits and risks. In this article, we’ll break down how each approach works, compare them side by side, and help you figure out which path might fit your goals best.
Three Main Ways to Get Bitcoin Exposure
There are three main ways to gain exposure to Bitcoin without all of them requiring you to own the asset directly. Here’s what each option involves.
What It Means to Buy Bitcoin Directly
Buying Bitcoin directly means owning the asset itself. You purchase it through a crypto exchange or trading app and hold it in your own wallet.
- Direct ownership: You have full exposure to Bitcoin’s price movements without any middle layer.
- Custody responsibility: You must handle the security of your Bitcoin through private wallets or trusted platforms.
- 24/7 trading: Bitcoin can be bought or sold at any time, unlike traditional stock markets.
What Is a Bitcoin ETF?
A Bitcoin ETF is an exchange-traded fund that tracks the price of Bitcoin. Instead of holding Bitcoin yourself, you buy shares of the ETF through your brokerage account.
- Easy access: ETFs trade like regular stocks, so you can invest through a standard brokerage account.
- No custody needed: The fund manages the Bitcoin, so you don’t have to worry about security.
- Regulated structure: ETFs are subject to market oversight, making them accessible for retirement accounts.
What Are Bitcoin Treasury Stocks?
Bitcoin treasury stocks are shares of companies that hold Bitcoin as part of their corporate reserves. Examples include Strategy (formerly MicroStrategy), Marathon, and Tesla.
- Indirect exposure: Your investment is tied to both Bitcoin’s performance and the company’s overall business results.
- Corporate strategy: These companies often use Bitcoin as a long-term reserve asset or as part of their business model.
- Stock market access: Shares trade during normal stock exchange hours, making them familiar to traditional investors.
Bitcoin vs. Bitcoin ETFs vs. Treasury Stocks
Each way of gaining exposure to Bitcoin has its own strengths and weaknesses. This table shows how they compare across the key factors investors usually care about.
Feature | Bitcoin | Bitcoin ETF | Treasury Stocks |
---|---|---|---|
Exposure | Direct ownership | Tracks Bitcoin price | Indirect via company balance sheet |
Custody | Investor responsibility | Handled by fund | Handled by company |
Accessibility | Requires crypto exchange | Easy through brokerage | Easy through brokerage |
Liquidity | 24/7 global trading | Stock market hours | Stock market hours |
Risk factors | Bitcoin volatility | Tracking error, fund fees | Company performance plus Bitcoin price |
Fees | Exchange or trading costs | Fund expense ratio | Brokerage trading fees |
Regulation | Varies by country | SEC-regulated | SEC-regulated |
Benefits and Drawbacks of Each Approach
Each option comes with unique upsides and downsides. Here’s what to keep in mind before deciding.
Buying Bitcoin Directly
- Benefits: Full control, no ongoing management fees, access to global 24/7 markets.
- Drawbacks: Security risks with custody, steep learning curve for beginners, complex tax reporting.
Buying Bitcoin ETFs
- Benefits: Easy access through a standard brokerage account, no custody responsibility, can be held in retirement accounts.
- Drawbacks: Fund fees reduce returns, trades only during stock market hours, and may not perfectly track Bitcoin’s price.
Buying Bitcoin Treasury Stocks
- Benefits: Exposure to Bitcoin plus potential company growth, easy to buy with a brokerage account.
- Drawbacks: Stock performance tied to company debt, governance, and other risks beyond Bitcoin’s price.
Which Option Is Right for You?
Choosing between Bitcoin, ETFs, and treasury stocks depends on your goals and comfort level.
- Direct Bitcoin ownership: Best for investors who want pure exposure and are willing to manage custody themselves.
- Bitcoin ETFs: Best for those who want regulated exposure with no custody worries inside a traditional account.
- Treasury stocks: Best for investors looking for Bitcoin exposure plus additional upside (and risks) tied to company performance.
Future Outlook for Bitcoin Investments
The future of Bitcoin investing is shaped by both market performance and regulation. Each of the three approaches—direct ownership, ETFs, and treasury stocks—faces different trends.
- Bitcoin’s long-term performance: Bitcoin has historically outpaced most asset classes over the last decade. Its volatility remains high, but for many investors, the growth potential outweighs short-term swings.
- Treasury stock performance: Companies like Strategy (MSTR) have outperformed Bitcoin itself at times because of leverage, but they’ve also seen sharper declines during downturns. The stock is a magnified bet on Bitcoin with added corporate risks.
- Bitcoin ETFs: With several approved, competition is driving fees lower. This makes ETFs an attractive entry point for traditional investors who want exposure without the hassle of custody.
- Corporate adoption: More firms may follow the treasury model if accounting rules shift from impairment charges to fair value. This change would make it easier to report Bitcoin holdings without distorting earnings.
- Mainstream adoption: Whether investors choose Bitcoin directly, ETFs, or treasury stocks, the trend points toward broader acceptance of Bitcoin in traditional portfolios.
Final Thoughts
Bitcoin, ETFs, and treasury stocks each provide a different way to gain exposure to Bitcoin. Buying Bitcoin directly offers the purest form of ownership, but it also requires you to manage custody.
ETFs make investing simple through a brokerage account, though they come with fees and limited trading hours. Treasury stocks tie your investment to both Bitcoin’s price and the performance of the company, which can magnify gains or losses.
The right choice depends on your goals, risk tolerance, and how hands-on you want to be. Some investors prefer direct ownership for maximum control, while others lean on ETFs or treasury stocks for convenience and familiarity. You don’t have to pick just one path, though—you can hold all three as part of a balanced strategy.
Frequently Asked Questions
Can I hold Bitcoin in a retirement account?
Yes. Direct Bitcoin ownership in traditional retirement accounts like a 401(k) is not common, but self-directed IRAs and some custodians allow it. Bitcoin ETFs are the simplest way to get exposure in retirement accounts since they trade like regular stocks.
How are Bitcoin ETFs taxed compared to owning Bitcoin?
Bitcoin ETFs are taxed like regular stock investments. You pay capital gains tax when you sell shares at a profit. Direct Bitcoin ownership can be more complicated because every sale, even small trades, is a taxable event.
Do Bitcoin treasury stocks always follow the price of Bitcoin?
Not always. While they are influenced by Bitcoin’s price, company-specific factors such as debt, revenue, or management decisions also impact the stock. This can make them more volatile than holding Bitcoin itself.
Is it safer to buy Bitcoin ETFs than owning Bitcoin directly?
ETFs remove the responsibility of custody, which lowers the risk of losing Bitcoin to hacks or lost keys. However, they introduce fund fees and limit trading to stock market hours, which may not suit every investor.
How much of my portfolio should I put in Bitcoin or related assets?
There is no one-size-fits-all answer. Many financial advisors suggest keeping Bitcoin and related investments to a small percentage of your overall portfolio, often between 1% and 5%, depending on your risk tolerance.