BlackRock IBIT vs Fidelity FBTC: Comparing spot Bitcoin ETFs

The custody split

I see a fundamental divide in how these funds manage their assets. BlackRock uses Coinbase Custody to hold its Bitcoin, while Fidelity uses Fidelity Digital Assets for self-custody. This distinction matters for investors who fear a single point of failure at a third-party custodian like Coinbase. IBIT has a larger asset base of $76 billion, and its massive volume produces tight bid-ask spreads for large positions. FBTC manages $18 billion in assets. IBIT mainly attracts institutional money, whereas FBTC captures retail investors through the Fidelity brand. You already know how Bitcoin works, so I will focus on these operational differences. Both funds launched on January 11, 2024. IBIT holds 0.000566 Bitcoin per share, while FBTC holds 0.000870 Bitcoin per share. IBIT requires 1,767 shares to equal 1 Bitcoin, but FBTC only requires 1,149 shares for the same amount. FBCT’s 52-week price range moved from the mid-$60s to over $110.

Fees and performance metrics

Fees are identical at 0.25% for both funds today. Neither issuer gives a cost advantage for long-term holders right now. BlackRock once had a fee-less ETF for the first $5 billion invested, but they now charge the full amount. I find that while BlackRock leads in total assets, Fidelity captures much more retail interest due to its established reputation in wealth management and its massive client base of individual investors. IBIT recorded a 37.09% return over the last three months, but FBTC only reached 11.92% in that same period. IBIT also shows a 11.79% return for the last month, while FBTC reached 13.31%. IBIT has a year-to-date return of -1.65%, and FBTC has a year-to-date return of -1.60%. The different share prices reflect how each fund packages the same underlying exposure.

The liquidity and verdict

The settlement speed differs between these two providers. IBIT settles on a T+2 basis, while FBTC settles on a T+1 basis. IBIT experienced a massive redemption event on January 12, 2026, when about 2,791 BTC left the trust. This outflow sent thousands of bitcoins to Coinbase Prime within hours. I consider the BlackRock fund the clear winner for active traders because its $76 billion size minimizes transaction friction. I find the reliance on Coinbase a legitimate weakness for IBIT investors who want to avoid counterparty concentration. FBTC remains a strong option for those who want to avoid using a single custodian. Fidelity has spent a decade integrating traditional finance with the crypto ecosystem. Authorized participants handle the creation and redemption of these shares in large blocks to keep prices aligned with the spot price. When an authorized participant delivers Bitcoin to the custodian, the ETF issuer creates new shares. When they redeem, the custodian releases Bitcoin from the reserves. In a redemption, the authorized participant buys a large block of ETF shares, presents that block to the sponsor, and receives the proportional amount of Bitcoin from the fund’s holdings. The participant then typically sells those returned bitcoins into the market to capture arbitrage profits. This process keeps the ETF share price tightly coupled to the net asset value. The massive scale of IBIT allowed it to become the fastest ETF to surpass $70 billion in assets. Does the added security of self-custody justify the lower liquidity? I choose IBIT.