How to Buy Bitcoin via Fidelity: 2024 Step-by-Step Guide

Can You Buy Bitcoin Directly Through Fidelity?

While Fidelity Investments doesn’t currently allow direct Bitcoin purchases from its brokerage platform, it offers robust alternatives for crypto exposure. As one of America’s largest financial institutions, Fidelity provides regulated, secure pathways to invest in Bitcoin through specialized financial products. This guide explores practical methods to leverage your Fidelity account for Bitcoin investments while maintaining the platform’s signature security standards.

Method 1: Buying Bitcoin ETFs Through Fidelity

The simplest way to gain Bitcoin exposure via Fidelity is through Bitcoin Spot ETFs. These SEC-regulated funds hold actual Bitcoin, tracking its price. Fidelity offers commission-free trading for its own ETF and competitors:

1. Open a Fidelity Account: Sign up for a brokerage account (Individual, IRA, or Roth IRA) at fidelity.com
2. Fund Your Account: Transfer cash via bank wire, ACH, or check deposit
3. Research Bitcoin ETFs: Compare options like:
   • Fidelity Wise Origin Bitcoin Fund (FBTC)
   • iShares Bitcoin Trust (IBIT)
   • ARK 21Shares Bitcoin ETF (ARKB)
4. Place Your Trade: Search the ETF ticker symbol (e.g., FBTC), select “Trade,” enter shares, and execute

Method 2: Using Fidelity to Fund External Crypto Exchanges

For direct Bitcoin ownership, link Fidelity to regulated exchanges:

1. Choose a Crypto Exchange: Select platforms like Coinbase, Kraken, or Gemini
2. Connect Fidelity via ACH: In the exchange’s funding section, add Fidelity as a bank using routing/account numbers
3. Transfer Funds: Initiate an ACH transfer (typically 1-3 business days)
4. Purchase Bitcoin: Buy BTC directly on the exchange post-transfer

Fidelity Crypto Services: What’s Available Now?

• Bitcoin ETF Trading: Full support for all approved spot Bitcoin ETFs
• Fidelity Crypto®: Mobile app for trading Bitcoin/ETH (limited availability)
• Digital Assets Account: Institutional-grade custody for large investors ($5M+ minimum)
• Research Resources: Market analysis and educational content on crypto investing

Pros and Cons of Fidelity Bitcoin Strategies

• ETF Advantages:
  • Tax-advantaged accounts eligible (IRAs)
  • No direct custody security concerns
  • Integrated with existing portfolios
• ETF Limitations:
  • Management fees (FBTC: 0.25% annually)
  • No direct Bitcoin ownership
• Exchange Funding Pros:
  • True Bitcoin ownership
  • Transfer to private wallets
• Exchange Risks:
  • Exchange security vulnerabilities
  • Separate tax reporting

Frequently Asked Questions (FAQ)

Q: Can I buy actual Bitcoin through Fidelity?
A: Not directly. Use Bitcoin ETFs for indirect exposure or transfer funds to external exchanges for direct purchases.

Q: What’s the minimum investment for Fidelity’s Bitcoin ETF (FBTC)?
A: No minimum – you can buy fractional shares starting from $1.

Q: Are Bitcoin ETF fees tax-deductible?
A: Yes, the expense ratio reduces taxable income in taxable accounts. IRA investments grow tax-deferred.

Q: Can I transfer Bitcoin to my Fidelity account?
A: No. Fidelity doesn’t support inbound Bitcoin transfers for retail investors.

Q: Is Fidelity Crypto available nationwide?
A: Currently available in 38 states with gradual expansion. Check availability in your state.

Q: How are Bitcoin ETF profits taxed?
A: As collectibles – long-term capital gains up to 28% after 1+ year holding period.

Q: Does Fidelity offer crypto staking?
A: No. Neither ETFs nor their Crypto service support staking rewards.

Key Considerations Before Investing

Bitcoin remains a high-volatility asset regardless of investment method. Fidelity’s Bitcoin ETF approach offers regulatory safeguards but lacks direct ownership benefits like wallet transfers. For retirement accounts, ETFs provide unique tax advantages unavailable through exchanges. Always:

1. Allocate only risk-capital (5-10% of portfolio max)
2. Enable two-factor authentication on all accounts
3. Consult a tax professional about crypto implications

Fidelity continues expanding crypto services, making its platform increasingly viable for compliant Bitcoin exposure. Bookmark their Crypto Learning Center for ongoing updates.