Best cryptocurrency ETF: How to compare options
No single cryptocurrency ETF is best for everyone. Compare spot, futures, and equity funds on fees, tracking, custody, and tax reporting before you choose.
Vahe HakobyanEditor-in-chief
Updated Oct 5, 20263 min readFact-checked
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- A futures ETF holds CME contracts, not coins.
- Equity funds hold mining or exchange stocks.
- The prospectus lists holdings, custodian, and risks.
Crypto ETFs trade on stock exchanges, and their flows and holdings are tracked separately. Crypto wallet options differ by how you store keys and sign transactions.
How do crypto ETF types compare?
No single type fits every investor. Each holds a different asset, follows a different price, and carries a different main risk. The table compares them on the same criteria.
How do holdings and custody differ?
Spot funds hold coins through a custodian, while futures funds hold cash-settled contracts and do not take delivery of coins. Equity funds hold shares of mining or exchange companies, not coins, so their value follows those businesses. The registration statement and prospectus describe the strategy, the custodian, and the risks.
How do fees and taxes compare?
A spot fund usually charges one expense ratio, while a futures fund also pays to roll contracts, which can add costs and tracking error. An equity fund charges its own ratio. These funds trade on exchanges, so liquidity depends on trading volume. Selling fund shares is generally reported like a securities sale, and futures inside a fund can follow different tax rules.
- Check the expense ratio in the fee table.
- See how closely the fund tracks its target.
- Read the tax note for how gains are reported.
Where are they available and regulated?
Spot bitcoin ETFs began trading in the US in January 2024 after the SEC approved them, and spot ether ETFs followed in 2024. Futures ETFs hold contracts that trade on the CFTC-regulated CME. Crypto-equity ETFs hold stocks of crypto-related companies, such as miners and exchanges, so returns can diverge from the coin price.
The Securities Act of 1933 and the Securities Exchange Act of 1934 govern exchange-traded product trading, and most ETFs are registered under the Investment Company Act of 1940.
Frequently asked questions
At launch, spot bitcoin funds paid no dividends, and spot ether funds did not pass through staking rewards. Check the current prospectus, because a fund's approach to staking can change. Equity funds can pay dividends from their stocks.
Many US brokers allow ETFs in an IRA if the provider offers them, and a traditional IRA generally defers taxes until withdrawal.
A closing fund usually liquidates and returns cash to shareholders. A delisting can move shares to over-the-counter trading.
