A Bitcoin ETF (Exchange-Traded Fund) is a regulated investment fund that tracks the price of Bitcoin and trades on traditional stock exchanges. It allows investors to gain exposure to Bitcoin's price movements through standard brokerage accounts without needing to directly purchase, store, or manage the cryptocurrency themselves. Bitcoin ETFs can be structured as spot ETFs (holding actual Bitcoin) or futures-based ETFs (holding Bitcoin futures contracts). The approval of spot Bitcoin ETFs in the US in January 2024 was a landmark event for institutional crypto adoption.
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“After the spot Bitcoin ETF was approved, billions of dollars flowed in within the first week as institutional investors gained easy access to BTC exposure.”