Knowledge base
"Invest in Bitcoin" gets used as if it describes one single action. In practice, it can mean three quite different things, and each one has a different answer to a simple question: what do you actually end up owning?
Broadly, there are three routes people use when they talk about investing in Bitcoin: buying it directly, buying a fund designed to track its price, or buying shares in a public company that holds Bitcoin on its balance sheet. It's worth saying upfront: only the first two actually involve owning, or tracking the value of, Bitcoin itself. The third is a genuinely different kind of investment, in a company, and we'll be clear about that distinction as we go.
This is the most literal version of "investing in Bitcoin." You buy bitcoin through an exchange and hold it yourself, either on the exchange or in your own wallet. You own the underlying asset outright, with no company, fund or middleman standing between you and it.
The trade-off is responsibility: you're in charge of keeping it secure, which usually means learning the basics of self-custody. Our article on how people store Bitcoin walks through what that actually involves.
A Bitcoin exchange-traded fund (ETF) is a fund designed to track the price of Bitcoin as closely as possible. Where available, you buy units in the fund through a stockbroking or investment account, in much the same way you'd buy any other fund or share, no wallet, no exchange account, no self-custody required. The fund itself holds the underlying bitcoin (or a close equivalent), so its value is designed to move in line with the Bitcoin price, minus any fund charges.
It's worth being clear that this route is more constrained for UK investors than it might first appear. The FCA has lifted its outright ban on retail access to London Stock Exchange-listed Crypto Exchange-Traded Notes (cETNs), but that doesn't make them straightforward to buy. US-listed spot Bitcoin ETFs remain blocked under UK retail regulations, and UK-listed cETNs are still classified as high-risk investments, meaning most mainstream platforms don't offer them at all, and the few that do typically require an appropriateness test, an investor questionnaire, and their own wrapper restrictions on top.
In practice, this route remains considerably more hands-on, and less widely accessible, than simply buying shares in a company through an ordinary stockbroking account. Rules in this area continue to evolve, so it's always worth checking the latest position with your platform or a regulated adviser rather than assuming this route is open to you, or exactly how open it is.
Some publicly listed companies choose to hold Bitcoin as part of their balance sheet, alongside their normal business activities, what we call a Bitcoin treasury company. Buying shares in a company like this means becoming a shareholder in that business, with everything that involves: its management, its strategy, its other assets and liabilities, and yes, its Bitcoin holdings as one part of the picture.
This is meaningfully different from the first two routes. A share price reflects the whole company (not simply the Bitcoin price) so it's influenced by management decisions, the performance of any operating business, the company's capital structure, and broader stock market conditions, alongside its Bitcoin holdings. One example of a company built this way is Smarter Web, trading as The Smarter Web Company plc (ticker: SWC), the UK's largest listed Bitcoin treasury company.
It's worth being precise about what that means. An investment in The Smarter Web Company plc (SWC) is an investment in the securities of the Company, it is not a direct investment in Bitcoin, nor a proxy, tracker or exchange-traded product providing direct exposure to Bitcoin. That said, a significant proportion of the Company's balance sheet is held in Bitcoin, so a material rise or fall in the Bitcoin price is likely to affect the value of the Company, and in turn the value of its shares. Bitcoin's volatility should therefore be treated as a material risk factor by anyone considering an investment in SWC, alongside the normal risks of investing in any publicly listed company.
Strictly speaking, only the first two routes involve owning, or closely tracking, Bitcoin itself. The third is an investment in a company, a related but distinct decision, with its own risks and its own reasons people choose it. None of the three is inherently better than the others; it depends entirely on what you're looking for, how hands-on you want to be, and how comfortable you are with each route's particular considerations, as well as which of them are actually accessible to you as a UK retail investor.
If you'd like to weigh these options up properly, our comparisons of buying Bitcoin directly versus buying shares in a company that holds it and Bitcoin treasury companies versus Bitcoin ETFs both go into more detail. Nothing in this article is financial advice, and anyone considering an investment should do their own research and consider speaking to a regulated financial adviser.
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In our next article, The Investment Case for Bitcoin, we'll look at the reasons serious, long-term investors give for holding Bitcoin at all.
