What types of Bitcoin ETFs are there?

The approval of spot Bitcoin ETFs in the United States has become a highly debated topic at the start of 2024. However, it is worth noting that futures BTC ETFs are already accessible in the same US market. Nevertheless, the realm of cryptocurrency ETFs extends beyond spot and futures options, and we are here to provide you with an overview. Let’s explore the different types of Bitcoin ETFs available.

1. Spot BTC ETFs: These ETFs directly invest in Bitcoin, offering stability to the markets they are exposed to and minimizing price fluctuations. For many investors, spot Bitcoin ETFs present a legitimate means of owning actual cryptocurrency.
2. Futures BTC ETFs: Unlike spot ETFs, these instruments do not involve direct investment in Bitcoin. Instead, they invest in derivatives that track the price of Bitcoin.
3. BTC ETFs with leverage: These instruments provide leverage of 2X or 3X, allowing investors to take either short or long positions. In the United States, the first such tool was the Volatility Shares 2x Bitcoin Strategy (BITX). Similar options can be found on certain crypto exchanges, offering tokens like BTC 3X Long (Bull) or BTC 3X Short (Bear). These leveraged instruments are also utilized in traditional financial markets, enabling investors to potentially earn three times greater returns when asset prices or indices fluctuate.
4. Multi-currency Crypto ETFs: The Toronto Stock Exchange (TSX) offers an instrument called the CI Galaxy Multi-Crypto ETF, which includes Bitcoin, Ethereum, and other cryptocurrencies.
5. Other currencies and countries: While the spotlight remains on spot BTC ETFs in the United States, it is important to acknowledge that such instruments are already available in other countries. Canada, Brazil, and various other countries offer a range of cryptocurrency ETFs based on Bitcoin, Ether, or a basket of cryptocurrencies. Canada, for instance, launched the first Ethereum ETF (ETHX) in 2021, allowing for direct purchase of the cryptocurrency. ETHX is traded on the Toronto Exchange. As of now, there are no Ether-linked ETFs available in the US market, although Fidelity and BlackRock have submitted corresponding applications.

In conclusion, the world of Bitcoin ETFs encompasses spot, futures, leveraged, multi-currency, and country-specific options. While the focus may currently be on the potential approval of spot BTC ETFs in the United States, it is essential to recognize the existing variety of cryptocurrency ETFs available globally.