In the field of crypto, a fund is an Exchange Traded Fund (ETF) that aims to track the price performance of a specific cryptocurrency or a group of cryptocurrencies. Instead of buying and storing cryptocurrencies directly, an ETF allows investors to buy shares in the fund, which in turn holds the underlying cryptocurrencies.

How does a cryptocurrency ETF work?

A cryptocurrency ETF operates similarly to traditional ETFs that track stock or commodity indices. The fund manager buys and stores a quantity of the cryptocurrency (such as Bitcoin or Ethereum) equivalent to the value of the shares of the fund offered. Investors can then buy and sell shares of this fund on the exchange just like regular stocks.

Types of cryptocurrency ETFs:

Spot Bitcoin ETFs: These funds hold actual Bitcoin and aim to track the spot price of Bitcoin in the market.