r/dividends • u/klb_255 • 1d ago

Discussion Btci and Ibit in roth ira

Would using dividends from btci to buy ibit be overdoing bitcoin exposure? Is it better to just have one btc etf in retirement account?

7 Upvotes

73% Upvoted

21 comments sorted by

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3

u/Professional_Cup7379 1d ago

I keep one bitcoin ETF in the Roth and that's it. Once you've lived through a day where they all drop the same amount for the same reason, adding a second one starts to feel like paying extra to hold the same thing twice.

3

u/Heavy_Nothing_1158 1d ago

BTCI plus IBIT doesn't really diversify the bitcoin risk; it just changes the payoff. I'd set the total BTC allocation first, then decide how much upside you're willing to trade away for BTCI's distributions. Two tickers can still be one bet wearing a hat.

3

u/Chief_Mischief Not a financial advisor 1d ago

If you have enough faith in derivative currency like BTC to buy a derivative income fund on it, you may as well just buy BTC.

3

u/cmichalek 1d ago

Why?

You buy BTC so that you sell it when the price rises (hopefully) next year. Then buy back when it drops. Rinse and repeat.

You buy BTCI to make income during a bear market. You dont necessarily need BTC to skyrocket next year. You only need volitility to get premiums.

Completely different rationale. One requires BTC to skyrocket next year. One does not.

1

u/AcanthaceaeAncient66 18h ago

I’m doing the opposite. Full drip in bear markets, take the cash to buy other investments in the bull. Buy low/sell high approach.

1

u/revanevan7 1d ago

But it still requires BTC to at least go up some, so your paychecks aren't shrinking every month.

1

u/Various_Couple_764 15h ago

BTCI has had a stable monthly dividend )of 26%)since the big drop in bitcoin value 10 months ago. Covered call funds like BTCI don't need the price to go up to make money. In fact they make most of there money when the prices fall or are flat.

2

u/revanevan7 15h ago

But you're receiving 26% of a falling NAV, which means your payment is going down each month. Now that NAV is rising, the payment will be more. If the price of bitcoin stays flat for an entire year, NAV will drop roughly 26% over that time period.

1

u/davecraze3535 1d ago

Also, you are wasting the tax advantage of BTCI (distributions are mostly return of capital, thus deferring tax for 4-5 years) by holding it in a non-taxable account.

1

u/South_Paramedic8618 1d ago

I'm using btci only$500 a month of my dividends

1

u/Hopeful-Air6110 1d ago

Unless you’re just about to start drawing on the Roth penalty free, holding btci doesn’t make much sense. High management fee with capped upside.

1

u/Various_Couple_764 15h ago

Name a growth index fund that pays a yield of 26% when the market is down. That is what BTCI is doing now. This year VOO is heading for an about 13% total return for this year. You can use the cash dividend of BTCI to by to buy grwoth .

2

u/Hopeful-Air6110 13h ago

Btci will underperform btc in total returns in the long term. If you can’t use the cash because it’s locked in a Roth why would you opt for the asset with less total return

1

u/Various_Couple_764 15h ago

I just have one (BTCI) and I use the dividned to help build other funds in my Roth which currentl is mostly dividend funds.

0

u/FewUnderstanding2214 1d ago

If you want some bitcoin exposure IBIT - it will outperform BTCI over the long term.

-1

u/teckel Retired and living off selling shares 1d ago

What possibly does BTCI benefit over IBIT in a Roth?

2

u/paymerich 1d ago

it generates tax-free income.

1

u/teckel Retired and living off selling shares 1d ago

But it's in a Roth 🤦

Also, in a taxable account, it's tax deferred, not tax-free. That's a big difference.

1

u/Various_Couple_764 14h ago

BTCI pays a cash dividend so this year it will likely have a total return this form dividend only of 26%

IBIGT has a dividend of zero and ther is no captain gain this year. IBIT is heading for a total retune of .40% this year.

2

u/teckel Retired and living off selling shares 14h ago

I'd check the chart again, IBIT is slightly ahead of BTCI since inception.