What are Crypto ETFs?

Crypto ETFs offer an attractive way to invest in cryptocurrencies like Bitcoin and Ethereum without having to buy the digital currencies directly. These exchange-traded funds bring together the world of traditional financial markets with the opportunities of the crypto sector. But are crypto ETFs really worthwhile, and what options are available for investors in Germany and Europe?

In this guide, you’ll learn what a crypto ETF is, how the funds work, and whether they could be the right investment for you. We’ll also show you alternatives, such as direct investing with Bitpanda.

• Crypto ETFs are exchange-traded funds that track the price movements of cryptocurrencies like Bitcoin, Ethereum, and XRP

• They provide a simple and regulated way to invest in the crypto market without actually owning the coins

• Advantages include ease of use, higher liquidity, transparent costs, and a regulated environment

• Disadvantages include higher fees, tracking errors, a limited selection, and no direct ownership of cryptocurrencies

• Alternatives, such as direct investing with Bitpanda, offer greater flexibility and additional benefits like staking

How can you invest in cryptocurrencies?

In general, you can buy cryptocurrencies directly via an exchange or place an order through a crypto broker. Several options are available depending on your individual goals, risk profile, and experience.

Here’s an overview of the most common investment methods:

• Direct purchase of cryptocurrencies
  Buy coins and tokens like Bitcoin or Ethereum through platforms such as Bitpanda at the current market price and store them in a wallet

• Crypto ETFs
  Exchange-traded funds allow investors to invest in cryptocurrencies without owning them directly. They are particularly suitable for those looking for a regulated and easily accessible investment product

• Crypto savings plans
  Regular investments in cryptocurrencies or crypto ETFs via a savings plan let you benefit from the cost-average effect and smooth out price fluctuations over time

• ETPs and ETNs
  ETPs and ETNs are traded on the stock exchange like ETFs. They offer direct access to cryptocurrencies or their price movements but differ in structure and risk

The differences between ETFs, ETPs, and ETNs

To invest in cryptocurrencies, you can use various exchange-traded products, such as ETFs or ETNs. Understanding the key differences between ETPs, ETFs, and ETNs can help you make the right choice.

What are ETPs?

Exchange Traded Products (ETPs) are a broad category of exchange-traded investment products that include ETFs and ETNs. ETPs can be physically backed, meaning they hold the underlying asset directly. These are called spot ETPs. Alternatively, they can be synthetically backed, tracking price movements through derivatives.

What is a crypto ETF?

An ETF (Exchange Traded Fund) is a fund traded on the stock exchange that tracks the performance of a specific index or a group of assets, such as stocks. Crypto ETFs track the price movements of cryptocurrencies like Bitcoin or Ethereum without requiring you to own the coins and tokens yourself.

ETFs are considered transparent and regulated, as they are monitored by issuers and financial authorities.

What are ETNs?

Exchange Traded Notes (ETNs) are debt-based financial instruments that track the price movements of an underlying asset. They rely on derivatives and often use leverage.

ETNs are not physically backed and carry an issuer risk, as their value depends on the financial stability of the provider. While ETFs represent fund shares, ETNs are more comparable to bonds.

Important: When looking for crypto ETFs, check carefully whether it's actually an ETF or just an ETN. ETNs are often listed alongside crypto ETFs, which can lead to confusion.

Which cryptocurrencies have ETFs?

At present, ETFs exist for three cryptocurrencies: Bitcoin, Ethereum, and, more recently, XRP. XRP is the only cryptocurrency you can invest in via crypto ETFs in Germany.

• In the US, the first Bitcoin ETF was launched in late 2021, followed by Ethereum futures ETFs about a year later

• These types of ETFs use futures contracts to track cryptocurrency price movements

• In January 2024, the first Bitcoin spot ETF was introduced in the US. Spot ETFs buy and sell cryptocurrency directly at the current market price

• In May 2024, Ethereum spot ETFs followed. After the SEC lawsuit against Ripple was resolved, XRP spot ETFs were listed in November 2024

The key takeaway: XRP ETFs are the only crypto ETFs available in Germany—they are not yet approved in the US.

While you cannot buy Bitcoin or Ethereum ETFs in Germany, they are available in the US.

• Several XRP ETF applications have been submitted in the US, but none have been approved so far

• Solana ETF applications have also been pending for years, but no approvals have been granted

The world of crypto ETFs could change rapidly in 2025, especially if the US government becomes more crypto-friendly. More cryptocurrency ETFs could soon be available.

Do you want to benefit from the crypto ETF boom, which could have a positive impact on cryptocurrency prices? With Bitpanda, you can trade a wide range of coins and tokens in real time, including Bitcoin, Ethereum, and XRP.

Are there crypto ETFs in Europe?

There is currently no crypto ETF available for the entire European market. However, in select countries—namely Switzerland, the Netherlands, France, and even Germany—you can invest in crypto ETFs on XRP from the American ETF issuer WisdomTree.

WisdomTree has taken a unique approach compared to other ETF issuers, making crypto ETFs accessible to the European market through its European branch. While these XRP ETFs are also planned for listing on US stock exchanges, the primary focus is on Europe.

In addition to crypto ETFs, there are also products like the Bitpanda Crypto Indices, which allow investors to diversify across multiple cryptocurrencies while automatically adjusting their portfolio. However, the Bitpanda Crypto Indices differ from crypto ETFs as they are not publicly listed on stock exchanges and are subject to different regulatory requirements.

Are crypto ETFs a good investment?

Investing in crypto ETFs can be a worthwhile option if you want to benefit from cryptocurrency price movements without having to buy and manage the assets yourself. You don’t need your own wallet or any technical knowledge of blockchain technology. Additionally, crypto ETFs operate in a regulated environment, making them particularly attractive to security-conscious investors.

Another advantage is that crypto ETFs are highly liquid, whereas individual coins and tokens are often available only in limited supply. For example, Bitcoin is capped at just under 21 million coins, while XRP has a maximum supply of 100 billion. The increased liquidity in ETFs makes them especially appealing to institutional investors, who can invest large sums into the crypto market.

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With Bitpanda Fusion, you can benefit from:

• Higher trading frequency

• The ability to trade larger volumes—ideal for any investment strategy

• No transaction fees

• Direct upgrades

• Real-time market analysis

• Industry-leading security standards

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Advantages of crypto ETFs

Crypto ETFs offer numerous benefits, making them an attractive investment option for many investors. They combine the opportunities of the crypto market with the simplicity and security of traditional financial products.

Key advantages at a glance

• Easy access to cryptocurrencies – Crypto ETFs allow you to benefit from the price movements of digital assets without having to deal with buying and managing cryptocurrencies directly

• Regulated environment – Since crypto ETFs are monitored by financial regulators, investors benefit from a high level of security and transparency

• Liquidity – Crypto ETFs can be traded on exchanges like stocks, allowing for quick buying and selling

• Seamless integration into existing investment strategies – You can add crypto ETFs to your portfolio just as easily as other exchange-traded funds, without needing additional tools or platforms

• No need for wallets – Since you don’t hold cryptocurrencies directly, you don’t have to set up a wallet or manage private keys

• Physical backing – Crypto spot ETFs are physically backed, meaning the corresponding cryptocurrency is purchased and held as collateral

What are the disadvantages of crypto ETFs?

Despite their benefits, crypto ETFs also come with certain drawbacks, which should be carefully considered before investing. Some risks and limitations are specific to crypto ETFs, while others apply to all exchange-traded products.

Key disadvantages at a glance

• Higher costs – Crypto ETFs often have a higher expense ratio than traditional ETFs, which can impact long-term returns

• Tracking errors – The performance of a crypto ETF may differ from the actual price movements of the underlying cryptocurrency, especially with synthetic products

• Limited selection – In Germany, only XRP ETFs are currently available. Investors interested in other cryptocurrencies must consider alternatives such as ETPs or direct investments

• Regulatory uncertainties – Crypto ETFs are subject to legal and regulatory risks, which can affect their availability and structure

• No direct ownership of cryptocurrencies – Since crypto ETFs provide indirect exposure to cryptocurrencies, you cannot benefit from staking or using coins within the crypto ecosystem

• Volatility – The high price fluctuations of cryptocurrencies also impact crypto ETFs, making them a higher-risk investment

While crypto ETFs come with risks, you can minimise them through strategic choices:

• Compare expense ratios across different ETFs

• Prefer physically backed products

• Stay informed about new market offerings

• Choose established issuers

Combining crypto ETFs with direct investments can provide greater flexibility and additional benefits, such as staking. Long-term strategies like savings plans can help mitigate volatility and manage investments more effectively.

Alternative to crypto ETFs: Investing with Bitpanda

If crypto ETFs feel too restrictive, or if you want a wider selection of cryptocurrencies, direct investment through Bitpanda could be an attractive alternative. Bitpanda offers a user-friendly platform where you can buy, hold, and diversify cryptocurrencies—without the limitations of ETFs.

Advantages of investing with Bitpanda

• Full control over your cryptocurrencies – Unlike crypto ETFs, you own the coins and tokens, allowing you to use them for staking, trading, or other crypto ecosystem activities

• Wider selection – Bitpanda provides access to a broad range of cryptocurrencies, not just Bitcoin and Ethereum

• Greater flexibility – Invest whenever and however you like, without being restricted by exchange trading hours

• Low entry barriers – Start investing with small amounts and gradually build your portfolio

• Easy diversification – With Bitpanda Crypto Indices, you can automatically invest in a diversified portfolio that is regularly rebalanced

• Savings plans – Set up automatic crypto savings plans to benefit from the cost-average effect and reduce exposure to market fluctuations

Why Bitpanda is a practical alternative

• User-friendly platform – Intuitive for both beginners and experienced investors

• High security – Regulated by European financial authorities with strong asset protection

• Lower fees – Compared to many crypto ETFs, Bitpanda often allows for cheaper investments, leaving more of your returns intact

Conclusion: Investing successfully in cryptocurrencies

Crypto ETFs can be a convenient way to invest in digital assets like Bitcoin or Ethereum without needing to own them directly. They provide regulated and straightforward access to the crypto market. However, the current selection is limited, with XRP ETFs being the only option available in Germany.

One drawback: If you invest in an XRP ETF, you do not own the coins. This means you cannot use them within the crypto ecosystem—you only benefit from price movements.

Alternatively, Bitpanda allows direct investments in a wide range of cryptocurrencies, offering more flexibility and additional features such as staking. Whether crypto ETFs or direct investments are the better choice depends on your individual goals, risk tolerance, and knowledge of the crypto market.

A careful comparison of advantages and disadvantages will help you make an informed decision and invest successfully in cryptocurrencies.

Frequently asked questions about crypto ETFs

Here are answers to some common questions about crypto ETFs.

Which crypto ETF is the best?

The best crypto ETF for you depends on your investment goals and preferences. Many investors prefer physically backed ETFs, as they offer greater security and transparency while closely tracking the real-time value of the cryptocurrency.

Since only XRP ETFs are currently available in Germany, your choice is limited. ETNs on cryptocurrencies can be an alternative, but they do not physically hold the asset—instead, they use derivatives and leverage and are classified as exchange-traded debt securities, not funds.

How do I compare crypto ETFs?

When comparing crypto ETFs, consider the following factors:

• Total expense ratio (TER) – A lower TER means higher net returns

• Physical vs synthetic backing – Physically backed ETFs hold actual cryptocurrencies and closely track their market price

• Liquidity – Choose ETFs traded on established exchanges

• Issuer and regulatory framework – Invest with trusted issuers that operate under strong financial regulations

Is a crypto ETF savings plan a good idea?

A crypto ETF savings plan is ideal for long-term investors who want to invest regularly in cryptocurrencies. By making monthly deposits, you can benefit from the cost-average effect, which helps smooth out price fluctuations over time. This is especially useful for investors with a long-term strategy.

Where can I buy crypto ETFs?

You can purchase crypto ETFs through traditional brokers or stock exchange platforms that offer access to ETFs. Currently, three European exchanges have listed crypto ETFs:

• SIX Swiss Exchange

• Euronext

• Xetra

What is the difference between traditional ETFs and crypto ETFs?

Traditional ETFs track indices of assets such as bonds, commodities, or stocks, whereas crypto ETFs track the price movements of cryptocurrencies.

• Crypto ETFs are often more volatile

• Traditional ETFs typically include multiple assets, offering broader diversification

• Crypto ETFs generally focus on a single cryptocurrency

More topics on cryptocurrencies

Whether you’re looking to get started with crypto trading or explore the latest trends, the Bitpanda Academy offers a wide range of guides and tutorials. Learn about blockchain networks, key trading indicators, and much more!