Spot Bitcoin ETFs vs Buying Bitcoin Directly: What It Means for US Crypto Apps

A second kind of buyer wants to send bitcoin or keep it in a wallet, the app that stores crypto. That buyer needs the actual coin, and your app can sell it.

Your app wins or loses that buyer on the first purchase. To win them, it has to deliver the bitcoin to the user's wallet, show the required ID from the start, and make clear which states it covers.

• ETFs gave investors bitcoin's price without a crypto app. Since 2024, they trade in ordinary brokerage accounts, and IBIT alone held about $66 billion by October 2026.
• The coins stay inside the fund. Swapping shares for bitcoin is limited to approved brokerage firms, so a holder who wants the coins has to sell the shares and buy the coins elsewhere, such as in an app.
• Apps can win the buyer who uses bitcoin. Investing is the larger use, and ETFs cover it. Sending, paying, or keeping bitcoin yourself still requires the coin, and an app can sell it to that buyer.
• The first purchase has to deliver the coin. Bitcoin sent to the user's own wallet, the required ID shown in advance, and clear state coverage make that first purchase end with a coin the user can use.

IBIT is a trust, a legal vehicle that holds bitcoin on behalf of its shareholders, and it sells shares that track bitcoin's price. A buyer gets those shares through a broker, next to their other stocks and funds, and pays a 0.25% yearly fee.

The fee is paid in bitcoin. The trust sells some of its holdings to cover it, so the amount of bitcoin behind each share shrinks over time.

In exchange for the fee, the holder never has to handle a coin or keep it safe, which suits an investor who only wants the price.

Fidelity, another large asset manager, runs the Wise Origin Bitcoin Fund (ticker FBTC), which works like IBIT, with an identical fee and the same limit on what holders can take out.

With either fund, the holder gets Bitcoin's price movements but never the coins themselves.

In-kind redemptions, paying out in coins instead of cash, let a small group of approved firms exchange ETF shares for bitcoin, a step ordinary holders can't take.

Until 2025, a fund like IBIT could only pay out cash when shares were handed back. In July 2025, the Securities and Exchange Commission (SEC), the US regulator of stock markets and funds, allowed crypto funds to pay out in coins as well.

That option has limits. Only a few large brokerage firms approved to work with the fund can use it, and only in big blocks of shares. An individual holder can't hand shares back to the fund.

Two ways out of IBIT

• Approved brokerage firm: hands back a big block of shares → can get about 22 bitcoin.

• Individual holder: sells shares on the market → receives cash → buys bitcoin somewhere else.

A crypto app can handle that last purchase, because the holder needs the coins and the ETF can't supply them.

An ETF share moves only between brokerage accounts. Bitcoin in a wallet the user controls can do things a share can't.

Four uses of the coin

• Send it to another person or app, at any hour.
• Pay for things where bitcoin is accepted.
• Keep it yourself, with no broker in between.
• Use it in compatible services, such as payment apps or loans backed by bitcoin.

A Federal Reserve survey shows how US adults used crypto in 2025:

• 9% bought or held it as an investment;

• 2% used it to pay for something;

• 1% used it to send money to friends or family.

Investing, at 9%, is more than four times as common as paying, and an ETF covers it. The other two uses, paying with bitcoin or sending it from a personal wallet, are less common and require holding the coin, which no ETF share can offer, so your app competes on those uses.

A user who already invests through a broker can buy IBIT in the same account as their stocks, without opening anything new. A buyer who wants the coin has to open an account in your app instead, so your first purchase has three jobs:

1. Put the bitcoin where the user controls it. The buyer came for the coin, and an ETF share can't be withdrawn to a wallet. At Mercuryo, we let apps sell crypto to their users, and we send bitcoin bought in your app straight to the user's wallet address.
2. Show the required ID before the check. The brokerage user has already been verified once. Crypto providers must verify buyers too, and the accepted documents vary, so the user should see the list before starting. We ask US users for their for their Social Security Number plus a photo ID, such as a driver's license or state ID card.
3. Say upfront who can buy. A user in a state your provider doesn't serve should learn it on the first screen, well before checkout. Mercuryo serves US users in every state except New York and Vermont.

When all three work, the user leaves the first purchase with bitcoin in a wallet they control, ready to send or spend.

Two people each put $1,000 into bitcoin on the same day. One buys IBIT in a brokerage app, and the other buys bitcoin in yours.

The bitcoin from your app can go to any wallet, while the IBIT shares can only move to another brokerage account.

A buyer who only wants the price can get it through a broker, and after the SEC's 2025 change, that brokerage account still can't deliver coins. Your app can win the buyer who needs the coin to move it or use it.

For the investor side of this comparison, see Crypto ETFs Explained: What Every US Investor Should Know in 2026.

Winning that buyer comes down to the first purchase and its three steps: where the bitcoin goes, which ID you ask for, and which states can buy.

If you run a US crypto wallet or exchange, our team can go through those three steps with you and set up bitcoin purchases that arrive in your users’ own wallets. Talk to the Mercuryo team.

Is IBIT stock the same as owning bitcoin? IBIT shares track bitcoin's price, and the holder owns shares in a trust that holds the bitcoin. They can't send the coins or keep them in their own wallet.

IBIT vs FBTC: what is the difference? Both charge 0.25% a year and track bitcoin's price. IBIT held about $66 billion in October 2026, against about $10 billion reported by FBTC at the end of June 2026. For the holder, both end up as shares in a brokerage account.

Can you move bitcoin from an ETF to a wallet? Redeeming shares for bitcoin is limited to authorized participants, the brokerage firms approved to work with the fund, and happens in big blocks worth about 22 bitcoin. An individual holder has to sell the shares and buy bitcoin separately.