What is a Bitcoin ETF?
A Bitcoin ETF (Exchange-Traded Fund) is a financial product that allows people to invest in Bitcoin without directly buying or storing it. The ETF is traded on traditional stock exchanges, just like regular stocks or index funds.
Types of Bitcoin ETFs
There are two main types:
- Spot ETFs: These are backed by actual Bitcoin held in custody.
- Futures ETFs: These track Bitcoin’s price using futures contracts rather than holding Bitcoin directly.
Why ETFs matter
ETFs make Bitcoin accessible to traditional investors who prefer regulated financial products. They offer exposure to Bitcoin with the convenience of a brokerage account, without needing a crypto wallet.
What to keep in mind
Bitcoin ETFs may have management fees and don’t offer the same level of control or privacy as owning real Bitcoin. However, they are a popular option for institutional and retirement investors.
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