BTCW May Not Be The Most Optimal Bitcoin Strategy As Lower Cost Peers Exist

Summary BTCW offers undifferentiated bitcoin exposure versus peers, so cost and liquidity are key factors for ETF selection. BTCW’s low AUM and trading volume make it less liquid than leading ETFs like IBIT, which may impact trading efficiency. US government initiatives, including the Strategic Bitcoin Reserve and stablecoin regulation, could support bitcoin prices and reduce volatility. Despite BTCW’s liquidity disadvantage, I recommend a BUY rating due to positive legislative tailwinds for bitcoin’s long-term outlook. The WisdomTree Bitcoin Fund ETF ( BTCW ) is a single-asset strategy designed to provide investors with exposure to bitcoin. Given that this strategy is not differentiated from peer bitcoin ETFs, I believe targeting the lowest-cost strategy with the strongest liquidity will be optimal for investors seeking bitcoin exposure through an ETF wrapper. Seeking Alpha BTCW has a 25bps expense ratio, on par with the popular strategy iShares Bitcoin Trust ETF ( IBIT ), which commands $83b in assets under management. By comparison, BTCW has merely $178m in AUM, being significantly overshadowed by larger bitcoin ETFs. In terms of liquidity, BTCW has an average of 63.5k shares changing hands on a daily basis, far below IBIT’s 46m average daily trading volumes. This may place BTCW at a disadvantage in terms of liquidity, as IBIT may provide traders substantially more depth by comparison. Given that these ETFs are not differentiated other than by fees and liquidity, I believe liquidity should be heavily weighed when considering bitcoin ETF options. We can visually see that there is next to no differentiation across strategies when comparing historical performance. Though there may be some minor differences, the trading patterns across the strategies have a near 1:1 match. The core difference is in strategies like the Hashdex Bitcoin ETF ( DEFI ) that trade bitcoin futures rather than spot bitcoin, providing some differentiation in returns. Seeking Alpha Bitcoin has received substantial support from the federal government through legislation passed or presented, paving the way for how Bitcoin is utilized and secured. In March 2025 , a Strategic Bitcoin Reserve was established by the US Government, allowing the federal government to hold bitcoin as it would real assets like gold or oil. As part of this, a bill has been introduced to establish how the Strategic Bitcoin Reserve ((SBR)) will be managed, allowing the government to acquire 1m bitcoins over a 5-year period. If passed, this bill could potentially support the price of bitcoin in the coming years, as the federal government will act as a large purchaser of bitcoin. This would change how the federal government acquires and holds bitcoin, which was previously the result of seized assets . Given that the federal government will act as a purchaser and not a seller for the SBR, bitcoin may receive significant price support, potentially leading to less market volatility. This could potentially benefit Bitcoin in a number of ways: Price stability can establish Bitcoin as a viable currency. Price stability may allow Bitcoin to be better utilized as a store of value rather than a speculative trading tool. Price stability may make Bitcoin less appealing, given that this is not an interest-bearing asset, acting purely as a store of value. The last point may take years before being realized; leading up to this point, a major price increase may occur as a result of the 1m bitcoins to be purchased in a 5-year timeframe. Despite the benefits of price stability, I believe the SBR takes away from the original intent of Bitcoin: No longer a “decentralized” asset. It could potentially push swing traders away from bitcoin and into other assets. With the federal government becoming a prominent acquirer of bitcoin, like the Strategic Petroleum Reserve ((SPR)), bitcoin prices can potentially be manipulated by the federal government for its own gain. With this in mind, the federal government could essentially manipulate the price of bitcoin similarly to how the Federal Reserve manipulates the Monetary Supply during periods of economic stress. In addition to the SBR, the US recently introduced the Genius Act of 2025, a bill designed to establish a regulatory framework for stablecoins in the US, targeting consumer protection and market stability. The Genius Act does this by requiring 100% reserve backing with liquid assets, inclusive of US dollars or short-term US Treasuries. Essentially, this bill will regulate stablecoins to the point of acting as a derivative of the USD. Unlike bitcoin, stablecoins are impacted by rate policy, monetary policy, and inflation, as stablecoins are designed to be a 1:1 tradeoff with their respective currency. The Genius Act will essentially ensure consumers’ holdings are backed by assets in full, similar to money market funds. Unlike money market funds, popular stablecoins like Tether (USDT) do not pay interest on holdings but rather pay interest when holdings are lent out or locked up for a period of time. Essentially, this is reflective of a certificate of deposit. Nonetheless, legislation being presented and passed may be supportive of the price of bitcoin for the coming years, establishing an appealing market for holders. Given the relative liquidity of BTCW, I believe a peer strategy may be more optimal. As for price direction, I am recommending BTCW with a BUY rating.

Source: Seeking Alpha