ETF: Crypto conquering traditional finances

The trust in cryptocurrency is growing! We're seeing it as crypto makes its way into traditional finance. A prime example is the growth of crypto ETFs: 72 ETFs are currently waiting for approval from the U.S. Securities and Exchange Commission (SEC). But what is an ETF, and how does it differ from actual cryptocurrencies?

What is a crypto ETF?

In conventional finances, an exchange-traded investment fund (ETF) that holds assets from different companies. Basically, it's a ready-made portfolio. It can include things like stocks, oil, gold, and even coffee. For example, a gold ETF is a fund that invests in gold bullion and tracks the performance of the price of gold. In the same way, crypto ETF are funds that invest in crypto assets and follow the price of currencies linked to them. Like other funds, crypto ETFs trade on regular stock exchanges, making it easy for almost anyone to invest in cryptocurrency without needing to understand all the nuances. The fund manages a portfolio of crypto assets, and you can purchase shares easily — for example, right from your bank's app.

Types of crypto ETF

There are two main types of crypto ETFs:

Spot Crypto ETF: Actually holds the cryptocurrency itself (e.g., holding Bitcoin directly).

Futures Crypto ETF: Tracks the price of cryptocurrency futures contracts (agreements to buy/sell at a future date), not the actual cryptocurrency.

Keep in mind that when you buy a share of a crypto ETF, you do not actually own the cryptocurrency!

What’s next?

Crypto ETFs are heating up! This surge in interest shows growing demand for cryptocurrency and a desire among everyday investors for more accessible tools to engage with innovative digital assets. Currently, the leading cryptocurrencies with ETFs are Bitcoin (BTC) and Ethereum (ETH), but others like Litecoin, Solana, and Dogecoin are waiting to follow.