An exchange traded fund (ETF) that employs the traditional structure of a fund while investing in digital currencies as an asset class. However, and unlike classic types of ETF that invest in or track indices, commodities, or baskets of assets, crypto ETFs invest in cryptocurrencies.
These ETFs, such as bitcoin ETFs, provide a direct exposure to the market price of a certain cryptocurrency. Crypto ETFs are much similar to investing in cryptocurrencies, but without having to own a digital wallet.
Crypto ETFs track the spot price of cryptocurrencies. The performance of a crypto ETF depends on the price movements of the underlying cryptocurrency. Much like stocks, crypto ETFs are traded on exchanges. Hence, investors can conveniently enter into the crypto domain without having to manager the complexities of digital currency transactions.
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