A Bitcoin ETF is an exchange-traded fund that tracks the performance of Bitcoin with futures contracts, which are derivative investment securities that allow investors to speculate on the future price of Bitcoin without actually owning it. Bitcoin ETFs are designed to give retail and other investors exposure to cryptocurrencies without needing to own them. They are traded on traditional exchanges instead of cryptocurrency exchanges, and the underlying assets within Bitcoin ETFs are Bitcoin futures contracts, which are traded on the Chicago Mercantile Exchange.

Investing in a Bitcoin ETF cuts complex storage and security issues for cryptocurrency investors, as they eliminate the need for security procedures and excessive funds while providing a familiar investment type. Bitcoin ETFs provide leverage to the price of Bitcoin without having to learn about how Bitcoin works, having to sign up for a cryptocurrency exchange, and taking on the risks of owning Bitcoin directly.

It is important to note that a Bitcoin ETF is linked to Bitcoin futures contracts, allowing investors access to Bitcoin without trading it. Bitcoin ETFs are investment companies regulated by the SEC, and the shares issued by the ETF are securities that must be registered with the SEC.

The first Bitcoin ETF to trade in the U.S. was ProShares Bitcoin Strategy Fund ETF, which began trading on October 19, 2021. As of October 2023, there are several Bitcoin ETFs available, including ProShares Bitcoin Strategy ETF (BITO), ProShares Short Bitcoin ETF (BITI), and VanEck Bitcoin Strategy ETF.