BlackRock’s IBIT and MicroStrategy represent two very different approaches to accumulating Bitcoin. Read the full analysis.
Frequently Asked Questions
Here is a list of FAQs about BlackRocks IBIT and MicroStrategys different approaches to accumulating Bitcoin
BeginnerLevel Questions
1 What is the main difference between BlackRocks IBIT and MicroStrategy
BlackRocks IBIT is a Bitcoin ETF that you buy like a stock on a regular stock exchange MicroStrategy is a public company that uses its own money to buy and hold Bitcoin directly on its balance sheet
2 If I buy IBIT do I actually own Bitcoin
Not directly You own shares of a fund that holds Bitcoin Its like owning a gold ETF instead of a gold bar You get the price exposure but you dont control the private keys to the Bitcoin
3 How does MicroStrategy get its Bitcoin
MicroStrategy uses cash from its business operations and more famously borrows money to buy large amounts of Bitcoin They buy it directly from crypto exchanges
4 Which one is safer for a beginner
IBIT is generally considered simpler and safer for a beginner It trades on a regulated stock exchange and is backed by a huge asset manager MicroStrategy is a single company with business risks beyond just Bitcoins price
5 Can I buy just a small amount of Bitcoin through either option
Yes IBIT shares are relatively cheap so you can buy a small piece MicroStrategy stock is more expensive per share but you can still buy fractional shares through most brokers
IntermediateLevel Questions
6 Why would someone buy MicroStrategy stock instead of IBIT
People buy MSTR because it often trades at a premium to its Bitcoin holdings This means if Bitcoin goes up 10 MSTR might go up 15 or more due to leverage from its debt and investor excitement Its a bet on the companys strategy not just the price of Bitcoin
7 Does BlackRock actually hold the Bitcoin for IBIT
Yes BlackRock uses a thirdparty custodian to hold the actual Bitcoin IBIT is a physically backed ETF meaning for every share you own there is real Bitcoin sitting in a secure wallet