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Eric Balchunas, senior ETF analyst for Bloomberg Intelligence, has ranked among the most influential observers of the crypto space as he tracked the progress of spot bitcoin ETFs over the past few months.  

But Balchunas’ own mother doesn’t understand digital assets, Balchunas confessed in a Sunday post on the social networking platform X/Twitter.  

“I think of it as funny money in space. Is there some kind of mine? They need a show that explains it to me and my friends like we [are] in 2nd grade.” 

While etf.com has already explained the basics of crypto ETFs and how the different types of bitcoin ETFs work in a way that beginning investors can understand, we haven’t provided a guide for non-investors or people who don’t follow crypto news. That is, until now! 

Whether you’re explaining the digital currency and related ETFs to your mom or you’re an eager student wanting to know more about how crypto works and why investors are talking about bitcoin ETFs, here are some basics:  

What Is Crypto? A Simple Explanation 

“Crypto” is short for cryptocurrency. It’s called that because it uses encryption, a process that converts information or data into a code to prevent unauthorized access. Imagine crypto as digital money for the internet. Just like you have coins and bills for buying things in the real world, cryptocurrency is like having special digital coins that exist only on the computer.  

What makes it cool for some people is that it's not controlled by any single person or government. Instead, a lot of computers work together to keep track of who has how much of this digital money. So users do not have to operate through banks or payment platforms with the potential complications and delays that are part of their systems.