Ever wondered what are ETFs and why is everyone suddenly talking about Bitcoin ETFs? Well, ETFs are one of the major reasons why the world of crypto has gained mainstream attention and institutional interest.
In January 2024, 9 spot Bitcoin ETFs were launched in the U.S. and since then asset managers such as Blackrock, Fidelity, Bitwise and Grayscale, which have a dominance in the traditional financial world, entered the crypto world.
Millennium Management, Goldman Sachs, Abu Dhabi’s Mubadala Fund and J.P. Morgan are some of the examples of popular institutions which now hold billions in crypto ETFs.
What Are ETFs?
Exchange traded funds(ETFs) are like stocks where you do not hold the asset but buy shares of a fund that trades on an exchange. Basically, it is a kind of investment fund that investors can either buy or sell on a stock exchange, making them similar to the individual stocks.
While stocks are for investors who aim for higher returns by picking some individual winners, ETFs are often chosen for building a diversified and low-cost portfolio for all those who prioritise steady growth. Examples of Exchange Traded Funds include Equity, Index, Commodity and Debt ETFs and these are some of the commonly traded ETFs.
How Are Crypto ETFs Different From Traditional Ones?
Crypto ETFs provide exposure to cryptocurrencies unlike the traditional ETFs. Let’s time travel to the year 2013 as the idea of a Bitcoin ETF surfaced around that time.
The U.S. Securities and Exchange Trading Commission(SEC) was a bit skeptical about volatile cryptocurrencies and therefore, the asset class faced several regulatory hurdles. But, after all checks and balances, the SEC eventually approved spot Bitcoin ETFs in January 2024 and since then, the 11 spot Bitcoin ETFs have attracted over $58B in net inflows.
Asset managers like BlackRock, Grayscale, Fidelity, ARK 21 Shares, VanEck and WisdomTree now collectively hold more than 7% of Bitcoin’s capped 21M supply.
Following Bitcoin ETF approvals, U.S Spot Ethereum ETFs launched on July 23 in 2024, pulling in over $11.8B inflows till date.
And finally, in 2025, popular Altcoin ETFs such as XRP, Solana and Dogecoin ETFs were launched. Currently, U.S. SEC is in process to approve more ETF Filings for more popular altcoins.
Interestingly, many basket ETFs have also been launched such as Grayscale’s GDLC fund which provide exposure to more than one cryptocurrencies at the same time. You can take exposure to not only Bitcoin, the king cryptocurrency but Solana, Ethereum, Cardano’s ADA and many more such cryptocurrencies.
Not just U.S. but other countries too, such as the UK, Canada, Germany are embracing crypto ETFs and have launched many such products.
What Are Different Types Of Crypto ETFs?
There are different types of crypto ETFs such as Spot, Futures and basket ETFs.
Spot crypto ETFs hold the underlying asset such as Bitcoin, Ethereum or XRP directly whereas Futures-based crypto ETFs provide investors with exposure to the price movements of a particular crypto asset through futures contracts, rather than holding the crypto directly. Another important type are the basket ETFs where you can get exposure of not one but several cryptocurrencies at the same time.
What Are The Advantages Of Investing In Crypto ETFs?
In 2024, Bitcoin ETFs have delivered up to 70% return at the time of the Trump-led euphoria during the U.S. presidential elections.
Professional Management: Such ETFs are being managed by top asset managers and professionals who have expertise in handling volatile markets such as crypto.
Diversification: Cryptocurrency ETFs provides you an opportunity to gain exposure to a single crypto or a basket of crypto assets and ultimately a diversified portfolio.
More Accessibility: Crypto ETFs can be traded through standard brokerage accounts just like traditional ETFs.
Security: Here, there is no risk of direct ownership of crypto. One can avoid risks of hacking or losing keys to digital wallets.
Why Are Financial Institutions Bullish On Bitcoin?
- Bitcoin ETFs
ETFs provide a safe and regulated way to take exposure to cryptocurrencies. ETFs now control over 7% of Bitcoin’s capped supply of 21M.
- Limited Supply
Bitcoin’s has a limited 21M capped supply. Historically, every Bitcoin halving has been followed by a strong rally to all-time highs. This inherent scarcity is what drives the value of Bitcoin.
- Institutional & Corporate Adoption
Big players like BlackRock, Fidelity, MicroStrategy, and others are aggressively accumulating Bitcoin. In fact, MicroStrategy’s CEO Michael Saylor believes that in the next 21 years, Bitcoin could reach $13M!
- Growing Global Demand
In several countries such as the United States Of America, Europe & the Middle East, Bitcoin is considered as a reserve asset and El Salvador was one of the first countries to do so. More and more countries are now considering adding Bitcoin to their national treasury reserves along with precious metals such as Gold and Silver.
Wall Street Titans Continue To Increase BTC Holdings
Wall street titans and global financial entities are continuing to increase their Bitcoin ETF holdings and this shows confidence in this particular asset class.
Goldman Sachs, the global financial giant, has nearly doubled its investment, now holding a $1.1B position in IBIT, BlackRock’s popular iShares Bitcoin Trust ETF.
In fact, New-York based asset management firm, Millennium Management, now holds 23M shares worth $1.32B of Blackrock’s iShares Bitcoin Trust ETF.
Additionally, sovereign wealth funds have also entered the market. Abu Dhabi Sovereign Wealth Fund has acquired $461M worth 8M shares of Blackrock’s Bitcoin ETF.
State of Wisconsin Investment Board is also not far behind in the race & it has acquired $339M worth 6M shares of Blackrock’s Bitcoin ETF.
Furthermore, US-based Tudor Investment Corporation has acquired $248M worth 4.4M shares and Hong Kong Investment Group Avenir has acquired 11.3M shares worth $599M in Blackrock’s Bitcoin ETF.
There are more such examples where Bitcoin ETFs are becoming popular amongst institutions.
Are ETFs A Good Option For Crypto Exposure?
Bitcoin began trading in the year 2010 and till 2011, it’s price was a few cents! Yes, Less than $1! But, in 2025, a few months back, we witnessed Bitcoin hitting an all-time high of $126K.
Banking giant Standard Chartered sees Bitcoin touching $300K by 2028 and one of the major factors is inflows in Spot Bitcoin ETFs. Asset manager Vaneck has predicted Bitcoin to touch $644K by 2028.
Additionally, Bernstein analysts see Bitcoin touching $150K by the end of 2026. Many such analysts see potential in this asset class and ETFs provide diversification, a safe and regulated way to invest.
Institutions are bullish and continue to gain exposure of Crypto ETFs. Hence, with a safe and regulated way to invest in cryptocurrencies, Crypto ETFs serve as the preferred investment route for Bitcoin exposure.
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