ETFs
In simple terms
An ETF, or exchange-traded fund, is a fund that holds a pool of assets and whose shares trade on a stock exchange like a normal stock. A crypto ETF lets someone get exposure to a coin's price through a regular brokerage account, without ever holding the coin or a private key themselves.
Definition
An ETF (exchange-traded fund) is a pooled investment vehicle whose shares trade on a stock exchange and are designed to track the value of the assets it holds, which in crypto ETFs may be the coin itself or futures contracts on it.
In depth
A spot crypto ETF holds the underlying asset with a qualified custodian and issues shares against it, while a futures-based ETF holds exchange-traded futures contracts instead and therefore tracks the futures curve rather than the spot price. Share price is kept close to net asset value by an arbitrage mechanism: authorized participants create and redeem large blocks of shares directly with the fund whenever the market price drifts from the value of the underlying holdings. The structure changes the risk profile rather than removing risk — the holder has no private keys and no self-custody, gains exposure to custodian and issuer risk, and pays an ongoing expense ratio deducted from the fund's assets. It also introduces a timing mismatch, since crypto markets trade continuously while the exchange listing the ETF does not, so price gaps can appear between the close and the next open. Availability, structure, and tax treatment of these products vary by jurisdiction and change over time.
Related terms
Educational only — not financial advice.