🔥 What is an ETF

An ETF (Exchange-Traded Funds) is an exchange traded fund. It buys millions and billions of dollars worth of securities of different companies, assembling them into an investment portfolio and then selling investors a share in it.

One ETF share is one share of the portfolio. ETF shares can be traded on an exchange like ordinary securities.

😮 How a bitcoin ETF works

A bitcoin-ETF is a fund organized on the same principle. The fund buys one or more cryptocurrencies, such as the same bitcoin, and sells its shares to investors on a stock exchange. This allows investors to earn on the growth in the price of cryptocurrencies without buying them directly on specialized cryptocurrency exchanges.

Thus, investing in bitcoin ETFs is safer and more convenient for many than buying the coin on a cryptocurrency exchange.

Issuers of cryptocurrency ETFs are fully responsible for the safety of the underlying asset. At the same time, such ETFs are regulated under securities laws. The fund's performance and transparency are monitored by a custodian and auditor, and the fund reports to a regulator, such as the U.S. Securities and Exchange Commission (SEC).

Besides ETFs, there are two other financial instruments that may provide interest to investors - ETPs and ETNs.

#BTC #ETFsApproval #ETFApprovalDreams #etfsaga