Market DataIntermediate

Cryptocurrency ETFs: What They Are and How to Buy

A cryptocurrency ETF tracks bitcoin or ether prices and trades like a stock. You buy it through a regular brokerage account, not a crypto exchange.

Vahe HakobyanEditor-in-chief Updated Oct 5, 20263 min readFact-checked

Illustration: World-Crypt

On this page

What Is a Cryptocurrency ETF?Which Crypto ETFs Are Available and How Do You Buy Them?What Costs and Tracking Limits Affect Crypto ETFs?How Does a Crypto ETF Differ from Owning Crypto?What Are the Main Risks and Limits of Crypto ETFs?FAQ

Key takeaways

Crypto ETFs trade like stocks during market hours, not 24/7.
Spot bitcoin and ether ETFs hold coins through third-party custodians.
Crypto ETFs are not FDIC insured or government backed.

Short answer

A cryptocurrency ETF is a fund whose shares trade on a stock exchange and track crypto prices, usually bitcoin or ether. You buy and sell it through a regular brokerage account, not a crypto exchange.

A cryptocurrency ETF gives you exposure to crypto prices without holding coins. It trades on a stock exchange, so you can use a regular brokerage account. Live data on Crypto ETFs tracks flows and holdings.

What Is a Cryptocurrency ETF?

A cryptocurrency ETF is a pooled fund that holds crypto assets or contracts. Its shares trade on an exchange and aim to track a crypto price. You own fund shares, not the underlying coins.

Which Crypto ETFs Are Available and How Do You Buy Them?

The SEC approved the first US spot bitcoin ETFs in January 2024 and spot ether ETFs in May 2024. These funds hold bitcoin or ether and aim to track their spot prices. You buy and sell them through a regular brokerage account like a stock.

Spot vs futures crypto ETFs
Feature	Spot crypto ETF	Futures-based crypto ETF
What it tracks	The spot price of the coin it holds	The futures price, which can differ from spot
Costs and tracking	Fees and spreads can cause tracking differences	Rolling futures can add costs and tracking error

What Costs and Tracking Limits Affect Crypto ETFs?

Crypto ETFs charge an expense ratio, and you may pay a commission or a bid-ask spread. Those costs reduce your return compared with the crypto price. The share price can also trade above or below net asset value.

How Does a Crypto ETF Differ from Owning Crypto?

Owning crypto directly means you control the private keys and can trade at any hour. A crypto ETF gives you a fund share.

Crypto ETF vs direct crypto
Feature	Crypto ETF	Direct crypto
Ownership	Fund shares; a custodian holds the coins	You hold the coins and control the keys
Tax treatment	Capital gains when you sell shares; fund distributions may be taxable	The IRS treats crypto as property, so sales and swaps are taxable events

What Are the Main Risks and Limits of Crypto ETFs?

A crypto ETF carries market risk, and its structure adds limits.

You do not own the underlying coins, so you cannot move them yourself.
ETF shares trade only during stock market hours, not 24/7.
A third-party custodian holds the coins, so you rely on that firm.

Frequently asked questions

Yes, if your brokerage offers the ETF and your IRA allows it. The shares trade like other securities, so an IRA can usually hold them.

A spot crypto ETF holds the actual coin and tracks its spot price. A futures-based ETF holds futures contracts, which can add roll costs and tracking error.

No, the FDIC does not insure crypto ETFs because they are not bank deposits. SIPC may protect you if your brokerage fails, but not against market losses.

Was this guide helpful?

Written byVahe HakobyanVahe Hakobyan is the editor-in-chief of World-Crypt. He covers bitcoin, markets and regulation, and leads the newsroom that fact-checks every story before it goes live.