If you are a busy person with a full-time 9-5 job interested in investing in crypto, then ETFs are the best solution for you. Now, you might be wondering what an ETF is. Well, crypto ETFs are exchange-traded funds that directly track a specific crypto’s price performance, thus making this process easier for all people. These types of ETFs have increased in popularity in the investment sector as they simplify the process both for professional and beginner crypto investors.
Recently, a spot Bitcoin ETF was approved, which is a major event, as it can increase the price of BTC. Crypto analysts, investors and crypto exchanges, including binance believe the spot Bitcoin ETF can take the crypto market to new heights. Ethereum is also a good candidate for ETF exposure.
In this article, we will dive deeper into the intriguing world of crypto ETF. Let’s start!
Exchange-traded funds, or ETFs in short, are investment tools that track the price of some assets that can be sold and bought on stock exchanges. There are numerous types of ETFs on the market, including future, spot, and leveraged ETFs, which can help different investment strategies. Now that you are familiar with the general term let’s move into crypto funds. Crypto funds are special types that focus on cryptos like Ethereum and Bitcoin.
Crypto ETFs offer a simple way for investors to participate in the crypto market without making them navigate the complexities of the crypto space. For instance, investors will not need to buy or store the crypto themselves, which will facilitate things. ETFs make the investing process less daunting and more familiar to those taking the first steps in this environment.
The year seems to have started excellent for ETFs, as 10 January 2024 became a history day for BTC when the U.S Securities and Exchange Commission (SEC) approved a spot Bitcoin ETFs. This event gave a green signal to the trading of the largest digital currency on regulated stock exchanges.
Bitcoin ETF vs Ethereum ETF
People might wonder which one between Ethereum ETF and Bitcoin ETF is better, but this question is quite complex and needs a general comparison between Ethereum and Bitcoin. Both BTC and ETH are leaders in market capitalization. Bitcoin is the first and largest digital currency by market cap, and Ethereum is the one that has introduced dApps and DeFi features.
Investing in Bitcoin is based on recent events and price speculation on outflow and inflow. On the other hand, investing in ETH depends on DeFi market primitives and technical advancements. Often, the prices between Ethereum and Bitcoin are correlated, and ETH accompanies BTC in price pumps and dumps. So, it depends on everyone’s needs and preferences which of these alternatives is better.
Investing in Bitcoin ETF
Bitcoin is the largest cryptocurrency by market cap, and the spot ETFs have improved its exposure to the entire world. Up to now, Bitcoin is the most popular option among crypto enthusiasts. Investing in BTC proves to be beneficial in the longer term. This year started well for Bitcoin with the help of the approval of the spot Bitcoin ETF, but unfortunately, the cryptocurrency didn’t maintain the bullish momentum.
However, 2024 will be an interesting year for Bitcoin, as numerous other events are expected to happen, which can bring a positive impact. For example, the Bitcoin halving could bring a bullish time, as this happened with the last events. All the past three halvings made BTC’s price experience massive spikes, which is also expected to occur this year.
Currently, Bitcoin is undergoing a correction phase, and crypto enthusiasts expect the largest digital currency by market cap to catch an upward momentum in April when the Halving will take place.
