Analyzing the Landscape of Bitcoin ETFs in 2026
The Crypto Climate One Year After Trump’s Presidency
One year ago, many were optimistic about the financial market’s direction under President Donald Trump, touted as the United States’ first "crypto president." His deregulatory stance was anticipated to invigorate the stock and cryptocurrency sectors, especially following his second term’s inauguration. However, in 2025, reality did not align with those expectations. The financial sector ranked second-to-last among the S&P 500’s eleven sectors, garnering only a 5% gain. Cryptocurrency aficionados faced even steeper challenges as Bitcoin, which peaked shortly after Trump took office, entered a downward spiral.
Bitcoin (BTC) marked an all-time high on January 25, 2025, shortly after Trump’s inauguration, but has since declined nearly 15%. In the wake of Bitcoin’s high, which occurred on October 4, 2025, the loss exceeded a staggering 27%. This downturn was echoed in the broader financial market, where the advent of crypto spot exchange-traded funds (ETFs) brought optimism yet failed to stave off significant losses across equity markets.
The Influence of Bitcoin ETFs
Despite the enthusiasm surrounding Bitcoin ETFs, which saw nearly $10 billion in inflows in 2025, challenges persisted. The U.S. Securities and Exchange Commission’s approval of the first eleven spot Bitcoin ETPs in January 2024 was a pivotal event. This decision opened doors for funds like the Grayscale Bitcoin Trust ETF (GBTC) to provide indirect crypto exposure, attracting a considerable following among investors wary of the decentralized finance (DeFi) landscape.
As the GBTC attracted over $20 billion in assets under management (AUM), the fund has mirrored Bitcoin’s market volatility, suffering a more than 29% decline since its high on October 6, 2025. However, with an expense ratio of 1.5%, significantly higher than the typical passively managed ETF—averaging around 0.05%—investors may begin to reconsider their approach.
Delving into Grayscale
Grayscale has made substantial contributions to the crypto ETF market, yet it faces criticism regarding shareholder returns. Despite its history of attracting capital, the steep fees and performance challenges may lead investors to rethink their positions. The question remains: with a loss exceeding 29% following recent peaks, is the GBTC still a worthwhile investment?
ProShares: Active Management Without Rewards
In contrast, the ProShares Bitcoin ETF (BITO) demonstrates a differentiated approach. Using a long Bitcoin, short U.S. dollar futures strategy, BITO has seen a trading volume of nearly 60 million shares. However, despite its active management, the fund dropped nearly 50% over the past year. With an elevated expense ratio of 0.95%, BITO presents a costlier option compared to the average actively managed ETF.
The current short interest of 17.42% suggests that even further downside risk may be looming for BITO. Are investors willing to pay a premium for a strategy that continues to disappoint?
iShares: The Quality Option
On a more positive note, the iShares Bitcoin Trust ETF (IBIT), managed by BlackRock, stands out as the largest Bitcoin ETF currently available. With an AUM of $68.33 billion and a more palatable expense ratio of just 0.25%, it has become a favorite target for institutional investors. With over 55 million shares of average daily trading volume, this fund enjoys significant liquidity.
While it mirrors Bitcoin’s recent declines—about 27% down from its peak—its solid foundation allows for potential recovery. A noteworthy development supporting IBIT is BlackRock’s recent partnership with an insurance company to offer exposure to Bitcoin through a fixed index annuity, a strategic move that may bolster its long-term growth prospects.
As the crypto landscape continues to evolve, investors find themselves at a crossroads. With a mix of underperforming funds and a shimmering opportunity, discernment is more vital than ever in making informed decisions about Bitcoin investments. It’s crucial to stay updated on market dynamics and emerging investment options, ensuring portfolios align with the latest trends and insights.
