Why Bitcoin in an ETF

Bitcoin exchange-traded funds (ETFs) have emerged as a transformative investment vehicle, offering a more accessible and lower-risk way for investors to gain exposure to Bitcoin. They are the fastest growing ETFs in history.

‍What is a crypto ETF?

A crypto ETF is a regulated financial product that is listed on a recognised exchange (like the Nasdaq), and that tracks the price of digital assets like Bitcoin or Ethereum. They are always required to be 100% physically-backed, with the underlying crypto being held in institutional-grade cold storage with independent custodians.

‍Why buy crypto as an ETF

Crypto ETFs provide a regulated product through which investors can obtain exposure to digital assets. They are bought and held in the same way as stocks and index funds - through existing brokers and investment platforms. Crypto ETFs therefore address many of the barriers that have historically kept investors from allocating to digital assets:

No technical knowledge of blockchain technology is required
No wallets or private keys are required to manage investment (and risk being lost)
Transparent pricing and reporting standards via regulated exchanges
[UK only] Potential for crypto investment to grow free of capital gains tax, when bought within an ISA or SIPP
Assets that are segregated from the issuer and protected in the event of insolvency

How do crypto ETFs compare to other options for buying digital assets

Investors today have several routes into crypto, from trading on centralised exchanges such as Coinbase or Kraken, to experimenting with decentralised exchanges and self-custody wallets. Each option has its trade-offs in terms of ease, security, and regulation.

Centralised and decentralised exchanges continue to play a major role in the crypto market. For some investors, ETFs may offer a more familiar

format since they can be bought through existing investment platforms. The table below highlights how these approaches compare.