Buying BTC ETFs on IBKR [2024]

Investing / Cryptocurrencies
1

Hi there

Did anyone manage to buy Bitcoin ETFs (e.g. FBTC, IBIT) on IBKR? I asked for permission (Bitcoin ETFs are regarded as “Complex or Leveraged Exchange Traded Products”), did the quiz (correct answers) and got the following message:

Our Appropriateness Assessment result shows that you have requested the following trading permissions that are not appropriate for your level of knowledge and experience.
Complex Or Leveraged Exchange Traded Products
The above indicates that you do not fully understand the risks associated with trading these products.
You may visit the IBKR Campus and learn more about the characteristics of these products and risks or research these products elsewhere.
We will not grant your request at this time.

Wrote a message to customer service, got the following answer:

Please be advised that there is and FCA restriction that applies to all IB-UK accounts where your MiFID status should be Professional in order to trade crypto-related products.

Meaning, since I’m not MiFID Professional, it’s impossible to buy BTC ETFs on IBKR? Even though I live in Switzerland where MiFID is not applicable?
Meanwhile, I’m allowed to buy Microstrategy.
Meanwhile, I’m allowed to buy Bitcoins on IBKR through Paxos.

Makes total sense to me…

Best thing is probably to buy Bitcoins on an exchange and to store it in a hard wallet anyway… Or am I wrong?

2

MicroStrategy is a publicly traded company, so you essentially are buying a stock. You can’t compare those.

So why don’t you buy BTC through Paxos? AFAIK it’s cheaper.

Depends on your profile. I think you can move out BTC from your Paxos wallet, but it’s expensive (?).

3

MicroStrategy consists almost entirely of BTC, just like a BTC ETF. So I think it‘s not a bad comparison. Only major difference is that MicroStrategy is leveraged, which makes it even riskier. About twice as volatile as BTC.

I‘d rather trust Fidelity (FBTC) than Paxos…:

4

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5

Yes, but this doesn’t change the fact that MSTR is a company, of which you buy a stock, and FBTC is a “complex” product with BTC as its underlying asset. Two completely different things, even if MSTR buys a lot of BTC. But I think you understand

I mean IBKR wouldn’t do business with them if they wouldn’t trust them, that’s for sure.

But ignoring all that, in the end it’s always better to buy the BTC yourself so that you can “physically” own them.

6

I understand. But an ETF full Bitcoins doesn‘t seem very complex to me.

But I will probably just store it myself.

7

Can’t find the previous thread on this topic, so let’s make this the current one.

8

True, a Bitcoin ETF doesn’t sound like it’s very complex to implement (modulo regulatory hurdles).

But, regardless of what you think of Bitcoin, I think for the masses to be participating in this, you need almost stupidly easily accessible financial instruments they can buy into? Like a Bitcoin ETF.* And for the price to go up you simply need more people participating.

Asking the “masses” to do self-storage is IMO a non-starter.**

* Probably heresy to the hard core DeFi folks, as the "legacy" finance industry just capitalizes on the latest fad asset class (in their terminology) to generate fees off the investors buying into it.

** If I were to invest in Bitcoin, I’d be the cold storage guy printing things out on acid-free paper multiple times stored in multiple physically separate locations.
1 Like
9

Funny thing, because I have the same issue:
When I owned an IBKR account, it was a UK based one - which was standard.

Then, there was an option for a short period of time where you could open a US based account - in the questionnaire one was asked, if one is going to trade crypto-coin-based products. If so: voilá, US-based account is opened.

Tried to to the same stuff couple of weeks ago for my gf; opened two UK accounts since I failed to get somehow the access to the US one.
Support also just mentioned „open a US account“, but somehow I am pretty stupid or incapable of opening said account. But it seems that this is still possible, according support.

Does anyone know more?