ETF
An ETF (exchange-traded fund) is a financial product traded on a stock exchange that tracks the price of an underlying asset. Bitcoin spot ETFs, approved in the United States in January 2024, allow investors to gain exposure to bitcoin through traditional brokerage accounts.
An exchange-traded fund (ETF) is a financial product that trades on a stock exchange throughout the day, similar to a company share. An ETF is designed to track the price of an underlying asset, index, or basket of assets, allowing investors to gain exposure without directly owning the underlying. For a Bitcoin spot ETF, the fund holds actual bitcoin and issues shares that represent fractional ownership of that holding. The ETF provider manages custody of the bitcoin; the investor holds shares in the fund through their brokerage account.
The approval of Bitcoin spot ETFs in the United States in January 2024 was widely regarded as a significant milestone. Within days of launch, these products saw billions of dollars in inflows, making the Bitcoin spot ETF launch one of the most successful new ETF launches in history by assets gathered. The approval followed years of repeated regulatory rejections and represented a formal entry point for bitcoin into regulated investment products available through mainstream financial institutions.
A Bitcoin spot ETF differs from a Bitcoin futures ETF. A futures ETF holds contracts that speculate on the future price of bitcoin rather than bitcoin itself, which introduces tracking differences and costs over time. A spot ETF holds the underlying asset directly, so its price should closely follow the spot price of bitcoin. This content is informational only and does not constitute financial advice or a recommendation to buy or sell any financial product.