Compare the cumulative fee drag of holding a Bitcoin ETF against direct Bitcoin custody in a taxable account. US spot Bitcoin ETFs pass through the underlying tax treatment as grantor trusts, so the comparison reduces primarily to the difference between the ETF expense ratio and any direct custody fees. Try several holding periods to see how the drag compounds over time.
Under these assumptions, the choice between direct Bitcoin custody and a Bitcoin ETF in a taxable account compounds to a meaningful difference over multi-decade horizons, driven primarily by the fee differential. Tax treatment is identical (both LTCG on the gain) since US spot Bitcoin ETFs are structured as grantor trusts.
US spot Bitcoin ETFs (IBIT, FBTC, ARKB, BITB, etc.) are structured as grantor trusts and pass through the underlying Bitcoin's tax treatment. Long-term capital gains apply identically to direct Bitcoin holdings and to ETF holdings; the calculator does not model a tax differential.
Differences not modeled: custody architecture (the ETF holds Bitcoin at a single custodian, typically Coinbase Custody, with concentration risk that direct self-custody avoids); inheritance and trust structures; ETF trading spread; access to Bitcoin's underlying (you cannot withdraw Bitcoin from an ETF position).
Assumed annual growth is a scenario, not a prediction. Try several growth assumptions to see how the comparison varies.