What Are Cryptocurrency ETFs? How Do They Work?

A cryptocurrency ETF is like a fund through which one can access a diversified portfolio of cryptocurrency tokens or coins for investors to trade in

Cryptocurrency exchanges are a nuanced businesses when it comes to trading. That's why some investors prefer trading or owning cryptocurrency through an exchange-traded fund or ETF. In functionality, cryptocurrency ETFs aren't very different from traditional ETFs and widely popular mutual funds. Cryptocurrency ETFs are traded over exchanges like New York Stock Exchange (NYSE) or the American Nasdaq Stock Market. This form of exchange makes it easier to trade crypto coins. Traditional ETF tracks index or basket of assets. Cryptocurrency ETF, on the other hand, tracks one or more digital tokens. What is cryptocurrency ETF? A cryptocurrency ETF is like a fund through which one can access a diversified portfolio of cryptocurrency tokens or coins for investors to trade in. ETFs offer transparency and greater liquidity. This exposes potential shareholders to the token or currency and individual investors can own the token in the crypto market. With an ETF, an investor won't need to manage multiple digital wallets just for acquiring and tracking different cryptocurrencies.