What is a Bitcoin ETF?
A Bitcoin ETF (Exchange-Traded Fund) is a financial tool that enables investors to engage with Bitcoin’s price without owning the cryptocurrency itself. Traded on conventional stock exchanges, these ETFs provide a structured, straightforward way for both individual and institutional investors to invest in Bitcoin.
There are primarily two types of Bitcoin ETFs: spot and futures. Spot ETFs directly reflect Bitcoin's market price by holding the actual cryptocurrency. In contrast, futures ETFs focus on Bitcoin futures contracts, allowing investors to speculate on Bitcoin’s future prices without actually holding the currency. These ETFs are designed to offer a more accessible and secure way for investors to enter the cryptocurrency space, mitigating issues related to security and regulatory compliance.