The crypto space has been talking about Bitcoin ETFs being traded publicly. However, back in 2018 there was not even one Bitcoin ETF that received approval from the Securities Exchange Commission. Can we really talk about the ETF being traded? The SEC member, Hester Peirce, says that yes, this moment will arrive sooner or later. ChangeNOW, a leading non-custodial cryptocurrency exchange, will help you make sense of what ETFs are and what are they for.
What is a Bitcoin ETF?
ETF stands for an exchange-traded fund. This fund is a type of investment that is relies on the price of an underlying asset – gold, oil or something else of this type. What it really means is: any investor can get or sell holdings represented by ETF to other market participants. The main plus of ETFs is that they are cheaper than the original asset and give investors an opportunity to gain access to some assets that would not be available to them otherwise.
According to the Winklevoss ETF description, the Bitcoin ETF that we are talking about in here has BTC as an asset it relies on. If you buy a Bitcoin ETF, what you really do is indirectly invest in Bitcoin. Due to the fact the ETFs are tracking the price of an underlying asset, it really makes not that much difference from owning the actual BTC.
ETFs come with a little bit more convenience than the coin – you do not have to securely store it or buy and sell it with crypto exchanges. Instead of this, ETF owners are purchasing a regulated investment vehicle that can be traded.
Currently, there are no Bitcoin ETFs available yet, but there are some exchange-traded BTC financial products ready for purchasing. We have made a short list of investment options for you to choose from:
How to invest in Bitcoin ETF?
Bitcoin Investment Trust
The Bitcoin Investment Trust was established in 2013 to grant the accredited investors an opportunity to purchase Bitcoin as a regulated investment vehicle. You can purchase a share in the investment fund that holds BTC as an underlying asset. There is a 2 percent charge for the annual management for holding shares in the Grayscale Investments Bitcoin Investment Trust.
Bitcoin exchange-traded nodes can be purchased and sold in on the Nasdaq Stockholm stock exchange. By buying Bitcoin ETNs, the investors can gain regulated exposure to BTC and Ethereum (since 2017)
Despite the fact that the Bitcoin ETFs are not available yet, there is already a number of blockchain exchange-traded funds that invest in blockchain stocks. There are currently more than five on the market ready for purchase.
Bitcoin ETFs are considered a great investment option for many. First of all, they are easy to buy – the simplicity of purchase would open the asset class to the groups of investors unreachable before. Secondly, the approval of Bitcoin ETFs public trading has a potential to boost the price of BTC to the new heights. The institutional and private investors who are not ready to work with the Bitcoin technology will be able to purchase ETFs and freely invest in the currency.