Crypto ETFs: A Guide to Cryptocurrency Exchange-Traded Funds

Crypto ETFs are a simple way to invest in digital assets without owning cryptocurrencies directly. These funds let you track coins like Bitcoin or Ethereum through a regular stock trading account. They offer an easier and more regulated option for gaining crypto exposure.

In this article, we explore what crypto ETFs are, how they work, the main types available, and which ones may suit different investment goals.

What Are Crypto ETFs and How Do They Work?

A cryptocurrency ETF (or crypto ETF) is an investment fund that tracks the price of digital currencies like Bitcoin or Ethereum. Instead of buying and storing crypto yourself, you can invest in a crypto ETF through a regular brokerage account — just like buying a stock.

There are two main types: spot ETFs, which hold actual cryptocurrencies, and futures-based ETFs, which use contracts to follow future prices. These are examples of ETFs with cryptocurrency exposure.

They let you invest without needing wallets or exchanges. Some are designed as an ETF of cryptocurrencies, meaning they track more than one coin in the same fund.

Popular choices include spot Bitcoin ETFs and Ethereum ETFs, which aim to mirror crypto price movements. Many see these as a more accessible and lower-risk way to invest in digital assets.

Crypto ETFs are traded on traditional stock exchanges and are offered by trusted financial providers. Some well-known options include the ProShares Bitcoin Strategy ETF (BITO) and newer Ethereum-based funds. For beginners or cautious investors, crypto ETFs provide a simple and regulated entry into crypto investing.

What Are the Different Types of Cryptocurrency ETFs?

If you’re interested in crypto but don’t want to deal with wallets, passwords, or exchanges, an ETF for cryptocurrency can be a great starting point. 

Below, you’ll find the main types of crypto ETFs and how each one works.

Spot Crypto ETFs (They Hold Real Bitcoin or Ethereum)

Sport Crypto EFTs are the most straightforward option. A spot ETF literally buys and holds real cryptocurrency — usually Bitcoin, though Ethereum ETFs are just starting to appear in 2025. If you buy one of these ETFs, you’re investing directly in the coin’s price, but you don’t need to manage any wallets or deal with exchanges.

For example, if you buy the iShares Bitcoin Trust (IBIT) or Fidelity’s Bitcoin ETF (FBTC), the fund is actually holding real Bitcoin on your behalf. If Bitcoin goes up, so does the ETF’s price.

These are great if you believe in Bitcoin long-term but don’t want the hassle of managing it yourself.

Futures-Based Crypto ETFs (They Bet on Where Prices Are Going)

Futures ETFs don’t own any actual crypto. Instead, they invest in futures contracts – basically, agreements to buy or sell Bitcoin later at a set price. These funds track the price of Bitcoin or Ethereum through the futures market, which can lead to some weird price differences if you’re not careful.

A good example is the ProShares Bitcoin Strategy ETF (BITO) – it was one of the first Bitcoin futures ETFs available in the U.S. It’s widely traded and approved by regulators, which is why many people started with it.

Just know that futures ETFs are a bit more complex. If you’re in it for the long haul, a spot ETF is usually a cleaner choice.

Blockchain ETFs (Invest in Companies, Not Coins)

Not ready to invest in crypto itself? You can still get exposure by investing in companies working with blockchain, the technology behind crypto.

Blockchain ETFs don’t hold Bitcoin or Ethereum. Instead, they buy stocks of companies like Coinbase, Nvidia, or Riot Platforms (which mines Bitcoin). Think of it like investing in the “picks and shovels” during a gold rush.

Two popular blockchain ETFs are BLOK and BKCH. They’re less volatile than pure crypto investments but still follow the ups and downs of the crypto market.

This is a good middle ground if you’re crypto-curious but not quite ready to go all in.

Thematic or Mixed ETFs (A Bit of Everything)

Some ETFs mix different types of crypto exposure into one fund. They might hold some blockchain companies, a few futures contracts, maybe even a little real crypto. It’s a mix for people who want to spread their investments.

Take ARK Fintech Innovation ETF (ARKF) for example — it invests in a mix of tech companies involved in crypto and fintech like Robinhood, Square, and Coinbase. You won’t get full-on crypto exposure, but you’re betting on the ecosystem around it.

This is great if you believe in the broader trend of digital finance but want to spread your risk around.

Leveraged, Inverse, and Synthetic ETFs (Not for Beginners)

There are also some specialty crypto ETFs made for traders who like risk. Here’s a quick rundown:

• Leveraged ETFs try to double or triple the daily movement of Bitcoin. So if Bitcoin goes up 2%, a 2× ETF might go up 4%. But it works both ways — losses are doubled too.
  
• Inverse ETFs are designed to go up when crypto prices go down. They’re often used by traders who want to “short” the market.
  
• Synthetic ETFs use complex financial tools to mimic crypto performance without owning any real assets.

One example is Volatility Shares 2x Bitcoin ETF (BITX), which offers 2× daily exposure to Bitcoin’s price. It’s fast-moving and not meant for long-term investing. 

These types of ETFs are best left to experienced traders who understand the risks.

So, Which ETF Is Right for You?

If you’re new to all this, start simple. A spot crypto ETF like IBIT or FBTC is a great entry point. It’s clean, regulated, and tracks Bitcoin directly. If you’re more cautious, a blockchain ETF will suit you better, since you’re investing in companies rather than coins. 

And if you’re feeling bold and know how to manage short-term trades, futures or leveraged ETFs bring more action — but they come with higher risk..

Whatever you choose, crypto ETFs make it easier to explore digital assets using the tools you’re already familiar with. No seed phrases, no weird apps – just log in to your brokerage and buy like you would a stock.

Spot vs. Futures Crypto ETFs: What’s the Difference?

Crypto ETFs let you invest in cryptocurrencies through regular stock platforms. The two main types are spot ETFs and futures ETFs. Below is a quick and simple comparison to help you understand the difference.

What is the Current State of Crypto ETFs?

Below, you’ll find what’s happening with crypto ETFs in 2025 and how the market is changing.

Bitcoin Spot ETFs Are Leading

Bitcoin spot ETFs let people track Bitcoin’s price directly without needing to own the actual coins. Big funds like IBIT, FBTC, and BITO are seeing a lot of money flow in, showing strong interest from both individual and institutional investors.

Ethereum Spot ETFs Are Growing

After Bitcoin, Ethereum spot ETFs have also been approved. These funds give direct access to Ether’s price performance and are becoming more popular, helping Ethereum gain recognition as a serious investment.

New ETFs for Other Cryptos

ETFs based on other cryptocurrencies like Solana (SOL), XRP, and Litecoin (LTC) are in the works. While still waiting for regulatory approval, these could soon add more variety to the crypto ETF market.

More Institutional Interest

Thanks to ETF approvals, more big financial institutions are getting involved in crypto. This shift has helped Bitcoin gain status as a digital version of gold and influenced how its price moves.

Regulation Is Becoming Clearer

In the U.S., regulators like the SEC have started approving more spot ETFs. This clearer legal framework is giving investors more confidence and helping the crypto market grow.

 Summary Table: Key Crypto ETFs

The crypto ETF market in 2025 reflects a significant evolution from its nascent stages, offering diversified and regulated investment avenues for both retail and institutional investors.

As regulatory frameworks continue to adapt and new products emerge, the accessibility and appeal of crypto investments through ETFs are poised to grow further.

Best Crypto ETFs to Buy in 2025 

Looking to invest in crypto without buying coins? Next, you’ll find the best crypto ETFs in 2025 that make it easy to get started through regular stock platforms.

iShares Bitcoin Trust (IBIT)

BlackRock manages this ETF and holds real Bitcoin. That means when Bitcoin goes up, this ETF usually goes up too. It’s one of the most popular and trusted options, especially for long-term investors who want direct exposure without dealing with crypto wallets.

Fidelity Wise Origin Bitcoin Fund (FBTC)

This one comes from Fidelity and is also a spot Bitcoin ETF. It’s known for low fees and strong performance. If you’re new to crypto investing but want a reliable and beginner-friendly option, FBTC is a solid pick.

ProShares Bitcoin Strategy ETF (BITO)

BITO doesn’t hold actual Bitcoin. Instead, it invests in Bitcoin futures, which are contracts that bet on Bitcoin’s future price. It’s easy to buy and widely available, but its price might not always match Bitcoin’s. It’s more suited for short-term investing.

ARK Fintech Innovation ETF (ARKF)

ARKF doesn’t invest in crypto directly. Instead, it holds shares of companies working in the crypto field,  like Coinbase and Robinhood. It’s a good way to benefit from the crypto industry’s growth without owning any coins.

Bitwise Crypto Industry Innovators ETF (BITQ)

This ETF includes companies that are deeply involved in the crypto world, such as mining firms and exchanges. It provides broad exposure to the industry and is a good choice if you believe in crypto long-term but don’t want to deal with digital assets directly.

Why Should You Invest in Crypto ETFs?

Investing in crypto ETFs offers a unique way to gain exposure to the digital currency market without the complexities of direct cryptocurrency investments. 

A crypto ETF typically tracks the price of various cryptocurrencies, allowing investors to diversify through ETFs that hold multiple assets. This aspect of crypto ETFs makes them an appealing option for those wary of cryptocurrency exchanges.

With the recent approval of spot crypto ETFs, like the ProShares Bitcoin Strategy ETF, investors can now access ETFs that invest in futures contracts. As ETFs are traded on traditional markets, they provide a more familiar investment vehicle for those looking to enter the crypto market.

Advantages of Investing in a Crypto ETF

Crypto ETFs are a simple way to invest in digital currencies without the stress. Here are 5 clear reasons why they’re a smart choice:

• No need for crypto wallets or special apps — you can buy a crypto ETF just like a regular stock.
• Some crypto ETFs include several coins, not just one, which helps reduce the risk if one drops in value.
• Most crypto ETFs come from trusted, regulated companies, giving you more protection.
• Like regular shares, you can trade crypto ETFs on the stock market during normal hours.
• No need to understand how crypto works — the ETF takes care of everything for you.

Risks of Crypto ETFs

Below are five common risks to remember before investing in a crypto ETF. Understanding these can help you make smarter and safer decisions.

• Cryptocurrencies are highly volatile. If prices fall, the value of your ETF can drop as well.
• Some ETFs track actual coins (spot ETFs), while others track futures contracts. Futures-based ETFs can be riskier and more complex.
• Many crypto ETFs focus only on major coins like Bitcoin or Ethereum, limiting exposure to smaller or emerging cryptocurrencies.
• Certain ETFs have higher management fees, which can reduce your overall returns over time.
• Changes in government regulations can affect your ETF, even if it’s traded on a traditional stock exchange.

How do Fees Compare Between Crypto ETFs and Other ETFs?

Crypto ETFs often have higher fees than traditional ETFs. For example, a typical S&P 500 ETF might have an expense ratio of 0.03%, while some Bitcoin futures ETFs charge over 0.90% annually. This difference is due to the added costs of managing crypto-related assets and the complexity of tracking digital currencies.

Some crypto ETFs, like ProShares Bitcoin Strategy ETF (BITO), invest in futures contracts rather than holding actual Bitcoin. This can lead to additional rolling costs, reducing returns over time.

Meanwhile, spot crypto ETFs, such as the recently approved iShares Bitcoin Trust (IBIT), typically have slightly lower fees since they hold real Bitcoin, though they still tend to charge more than most stock-based ETFs.

Although crypto ETFs trade like regular ETFs on stock exchanges, investors should know the higher management costs and volatility. As more spot Bitcoin ETFs enter the market, we will see increased competition and lower fees.

Tips on How to Invest in a Crypto ETF (Step by Step)

Here’s a quick and easy guide to help you start investing in crypto ETFs, step by step:

What is The Best Way to Invest in Crypto ETFs?

The best way to invest in a crypto ETF depends on your goals. If you want direct exposure to digital currencies, look for a spot ETF crypto that holds the underlying assets. If you’re comfortable with more risk and complexity, futures-based ETFs are also an option. 

As of January 2024, the ETF crypto market has grown, offering more choices for different strategies. Whether you want to invest in well-known coins or a broader crypto basket, ETFs are designed to suit your preferences. 

Compare fees, understand the fund’s structure, and match the ETF with your risk tolerance.

How to Find a List of Crypto ETFs

You can find up-to-date cryptocurrency ETF lists on major financial websites like Morningstar, Bloomberg, Yahoo Finance, or platforms like CoinMarketCap. These sources provide overviews of available ETFs, including performance, fees, and the assets each one tracks.

Reviewing these lists can help you choose a crypto ETF that aligns with your investment strategy.

What to Consider Before Investing in Cryptocurrency ETFs

Before investing, ask yourself:

• What type of crypto assets does the ETF hold (spot vs futures)?
• What are the management fees?
• Is the ETF from a reputable, regulated issuer?
• How volatile is the fund’s performance history?
• Does it fit into your overall portfolio and risk profile?

Also, consider diversifying by choosing multiple ETFs to reduce exposure to a single asset.

ETFs in Cryptocurrency: Bottom Line

Crypto ETFs make it easier to access the cryptocurrency market through familiar tools like stock exchanges. They provide a range of options based on your goals, from lower-risk exposure to Bitcoin to more advanced strategies.

Before you invest, it’s wise to start with a spot ETF if you want straightforward exposure to crypto prices. Take time to compare fees, as they can vary more than with traditional ETFs. Always review what the fund actually holds and how it’s structured to be sure it aligns with your strategy.

Use a trusted brokerage platform, and consider spreading your investment across more than one ETF to reduce risk. A thoughtful, informed approach can help you get the most out of your crypto ETF investment.

FAQs About Crypto ETFs