What is ETF in Crypto

With the cryptosphere growth, there are more and more investment options emerging. Exchange-traded funds (ETFs) are one of them. They allow you to access the crypto assets without directly buying them. Why else do ETFs attract attention? We discuss it in this article.

What is ETF?

A crypto ETF is an investment fund type that tracks the price of a single cryptocurrency or a wide range of cryptocurrencies. Like traditional ETFs, which track the S&P 500 index or the gold price, crypto ones allow investors to access digital assets without the need of owning them. These ETFs are traded on traditional stock exchanges, making it easier to invest in crypto via regulated financial markets. So, investors don’t have to manage crypto wallets and learn blockchain technology principles.

How Do ETFs Work?

When investing in a crypto ETF, you are buying a fund portion, which reflects the asset or the entire group price. This can be compared to buying a share with its value fluctuating during the day—the same happens with cryptocurrency. In this case, investors buy ETFs that “mimic” owning a company’s shares running on blockchain technology.

Investors need to ensure that the ETFs are priced accurately. That is what fund managers do: they constantly monitor the cryptocurrencies value. ETFs make it easy for beginning investors to enter the market, increasing new money flow, and as a result, liquidity. All this leads to the cryptocurrencies’ growth. It’s also worth remembering that a crypto ETF will work only if it complies with the region's jurisdiction.

Types of Crypto ETFs

Cryptocurrency ETFs are classified into several types, designed for different investment strategies. The main are spot and futures ETFs, but there are also ones tied to coins (single currency and multi-currency). Read about them below.

Spot ETFs

These are exchange-traded funds, which track the assets’ market price in real time. When an investor buys a spot ETF, they get access to crypto. This type of fund is considered an easy and stable option for investing.

Futures ETFs

In this case, the funds are invested in futures contracts rather than in the crypto assets. The contract includes terms to buy or sell crypto in the future on a specific date and at a predetermined price. Futures ETFs are useful in markets with the direct crypto ETFs prohibited.

Single Currency ETFs

There are ETFs that are linked to only one asset. For example, exchange-traded funds on the largest crypto, Bitcoin, are distinguished as a separate class. With them, investors track the BTC price dynamics without owning it directly.

Another large class is Ethereum ETFs, which track the Ethereum price and reflect its changes. Some of them focus on its specific aspects—for example, the smart contracts or the DeFi platform use. This expands ETFs’ use cases for investors.

Multi-currency Basket ETFs

Such ETFs give an opportunity to invest in several cryptos at once rather than focusing on a single asset. Such diversification allows investors to increase the chances to profit and saves them from the risks connected with owning a single coin.

Blockchain ETFs

Such ETFs mean investing in companies involved in blockchain technology development. These can be blockchain-based organizations, which provide services related to digital assets, or these can be miners. Blockchain ETFs ensure participation in the broad blockchain ecosystem that may indirectly benefit from the cryptosphere growth.

Are Crypto ETFs Approved?

Now let's take a closer look at the crypto ETFs legal aspects.

Spot ETFs

Approval status: approved in Brazil, Canada, US and Europe, but availability is limited.

Spot ETFs are approved in Brazil, Canada, and some European countries. They faced some regulatory challenges in the US, as the Securities and Exchange Commission (SEC) initially delayed their approval until 2024. But later such spot ETFs as iShares Bitcoin Trust and Fidelity Ethereum Fund became available there. As of 2025, spot ETFs are accepted in many regions, but with limited availability in some. The ETFs are difficult to deal with in markets with stringent regulatory frameworks.

Futures ETFs

Approval status: widely approved.

These ETFs’ first approval was in the US in 2021 with the ProShares Bitcoin Strategy ETF product; now they are accepted in Europe as well. While futures contracts are an understandable way to invest, they often face volatility. This is connected with rollover fees and distortions due to contract expiration. Despite this, futures ETFs are considered one of the most widely used options.

Bitcoin ETFs

Approval status: approved in the US and Europe.

BTC price-tracking funds were approved in several jurisdictions. Firstly, the SEC approved the first Bitcoin ETF in October 2021, which was the ProShares Bitcoin Strategy ETF, utilizing futures contracts. Secondly, the SEC approved spot ETFs in 2024. They became available in Europe too, including the 21Shares Bitcoin ETP being the most popular. As of 2025, Bitcoin ETFs are widespread; moreover, there are multi-asset options, which develop now.

Ethereum ETFs

Approval status: approved in the US and Europe.

Since 2021, Ethereum futures ETFs have been accepted in the US, while spot ETFs were approved in 2024 only. In Europe, these ETFs are available as ETPs—similar to ETFs but with a different structure. Overall, the Ethereum ETFs approval has increased interest in the blockchain potential, especially the smart contracts and DeFi features.

Multi-currency Basket ETFs

Approval status: approved in the US and Europe.

Gaining access to different cryptocurrencies within a single product is not a popular solution. Nevertheless, these ETFs became spread in Europe via ETPs in 2020, including the 21Shares Crypto Basket Index. As for the US, the high-profile event occurred there: the SEC approved Grayscale's Digital Large Cap Fund as the first US ETF with a multi-crypto basket in 2025, which contains Solana, XRP, and Cardano. For today, this approval points to the increasing interest in crypto products’ diversifying.

Blockchain ETFs

Approval status: approved in the US and Europe.

Blockchain ETFs are available for buying in the US and Europe. Among the most prominent products are the Siren Nasdaq NexGen Economy ETF and the Amplify Transformational Data Sharing ETF (BLOK). Investors wanting to gain exposure to the blockchain are seeing the long term benefits.

How Does ETF Approval Affect the Price of Cryptocurrency?

The crypto ETF approval leads to four phenomena: increased demand for the assets, high confidence in the cryptos, grown liquidity, and speculative trading. Here's what all of this lead to in turn:

• Increased demand for assets. With ETFs, more investors gain access to cryptocurrencies, which makes their value increase.

• Confidence in cryptos. ETF approval increases investor confidence and overall market legitimacy; this further attracts more capital.

• Enhanced liquidity. ETFs stabilize the prices, so long-term investors are more interested in projects, and market liquidity increases.

• Speculative trading. Short-term price swings often occur during the ETF approval period due to rapid buying and selling of assets.

Are Crypto ETFs a Good Investment?

Crypto ETFs are a great investment option for those who want access to digital assets without the challenges tied to owning them. ETFs provide easier participation in the crypto market, guarantee regulatory protection, and offer diversification. At the same time, ETFs depend on the coins’ volatility and charge management fees, which can lower long-term returns. Therefore, crypto ETFs will suit investors who are willing to take risks, but they won’t be the right solution for people looking for stability. The essential aspect to consider for both groups is that this investment option offers security.

How to Invest in ETFs?

When investing in ETFs, it should be following an algorithm to do everything correctly and efficiently. The process consists of several steps:

• Step 1: Choose a broker. Select a brokerage account that allows ETF buying. Pay attention to the platform's rating, fee policy, and security measures.

• Step 2: Research ETFs. Determine the ETF type you plan to invest in. Learn its assets, history, and analytics to make a favorable choice.

• Step 3: Fund your account. Deposit money into your brokerage account. This can be done via bank transfer or paying with a debit card—depending on the broker terms.

• Step 4: Place an order. Find the desired ETF on the page by its ticker symbol, select it, and place an order. You may buy ETFs during market hours.

• Step 5: Monitor your investment. Constantly learn the bought ETF performance and adjust your portfolio as the market changes. This way you will maximize your returns.

Have you ever tried buying crypto ETFs? Share your experience or ask questions in the comments if you have any!