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Should your institution buy a Bitcoin ETF or hold Bitcoin directly? This guide compares costs, custody, regulation, and which approach makes sense at different portfolio sizes.
Bitcoin ETFs
✅ Pros
No custody hassle, regulated wrapper, familiar structure for boards
❌ Cons
Management fees (0.2–1%), tracking error, no actual Bitcoin ownership
Direct Holdings
✅ Pros
Full ownership, no ongoing management fees, can use for payments
❌ Cons
Custody complexity, security responsibility, accounting burden
Cost Comparison: £10M Portfolio
| Factor | Bitcoin ETF | Direct Holdings |
|---|---|---|
| Annual fees | £20k–100k/year | £20k/year custody |
| Setup cost | £0 | ~£50k |
| 3-year total | £60k–300k | £110k |
| 5-year total | £100k–500k | £150k |
Verdict: Direct holdings are cheaper long-term if your portfolio exceeds £5M. ETFs are simpler and better for smaller allocations or short-term positions.
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Sento earns a referral if you click through our links — this never affects our recommendations. Prices and details correct at time of publication. Updated February 2026.