Cryptocurrencies are becoming increasingly popular as an asset class. However, they can be challenging to trade for beginners. While owning real cryptocurrencies offers many advantages—such as full control via a personal wallet—investors seeking exposure to price movements without direct ownership can consider crypto ETFs (Exchange-Traded Funds).
Crypto ETFs, ETNs (Exchange-Traded Notes), and ETPs (Exchange-Traded Products) provide the benefit of being easily tradable on stock exchanges. Below, we explore these investment vehicles in detail.
Crypto ETFs: Key Takeaways
- No crypto ETFs are approved in Germany or Europe, but investors can access crypto ETPs.
- ETPs umbrella term for exchange-traded products (ETFs, ETNs, ETCs).
- ETPs exist for major cryptocurrencies, with Bitcoin being the most popular.
- Drawbacks: Annual fees and no direct ownership of the underlying crypto.
- How to buy: Through a broker via a stock exchange.
1. Available Crypto ETNs and ETPs
Since UCITS regulations restrict single-asset ETFs in Europe, we focus on ETPs approved in Europe. The largest by market capitalization are:
| ETP/ETN | ISIN | Cryptocurrency | Volume (EUR) | TER (%) | Replication Method |
|-----------------|-----------------|----------------|--------------|---------|--------------------|
| ETC Group Physical Bitcoin | DE000A27Z304 | Bitcoin | 1.2B | 2.00 | Physical (BTC-backed) |
| CoinShares Physical Bitcoin | GB00BLD4ZL17 | Bitcoin | 1.4B | 0.25 | Physical (BTC-backed) |
| 21Shares Solana Staking ETP | CH1114873776 | Solana | 1.1B | 2.50 | Physical + Staking |
Key selection criteria:
- Physical backing (the ETP holds the actual cryptocurrency).
- Staking options (for Proof-of-Stake networks like Ethereum/Solana).
2. What Are Crypto ETFs and ETNs?
Regulatory Differences: Europe vs. U.S.
- Europe: UCITS rules prohibit single-asset ETFs. Only crypto ETPs/ETNs are available.
- U.S.: Bitcoin and Ethereum ETFs (e.g., iShares Bitcoin Trust IBIT) are approved.
How Crypto ETNs Work
ETNs are debt securities tracking an asset’s price. Unlike ETFs, they carry issuer risk (no segregated assets).
Top Cryptocurrencies by Market Cap
- Bitcoin ($1.9T): Digital gold, Proof-of-Work.
- Ethereum: Smart contract platform, transitioning to Proof-of-Stake.
- Binance Coin (BNB): Utility token for Binance exchange.
- Solana: High-speed blockchain competitor to Ethereum.
- Ripple (XRP): Bank-focused payment network.
3. Best Crypto ETPs
- CoinShares Physical Bitcoin: Lowest fees (0.25% TER), fully BTC-backed.
- 21Shares Crypto Basket Index ETP: Diversified exposure (2.50% TER).
Security note:
- Coins stored in cold storage with multi-signature wallets.
- Insurance up to €250M (ETC Group).
4. Investment Thesis: Are Crypto ETPs Worth It?
Pros
- Simplified access (no wallet/exchange account needed).
- Tax benefits: If an ETP offers delivery option, gains are tax-free after 1 year (Germany).
Cons
- High fees (up to 2.5% annually).
- Issuer risk (ETPs aren’t protected as segregated assets).
Alternatives
- Direct crypto ownership (lower fees, full utility).
- Crypto stocks (e.g., Coinbase, MicroStrategy).
5. Risks and Opportunities
| ✅ Pros | ❌ Cons |
|-------------|-------------|
| Easy trading | High fees |
| Broker integration | No asset segregation |
| Diversification | Limited to price exposure |
6. How to Buy Crypto ETPs
- Open a brokerage account (e.g., Scalable Capital).
- Search for the ETP’s ticker (e.g., BTCN for CoinShares Bitcoin).
- Place an order (lump sum or via savings plan).
7. Conclusion
Crypto ETPs offer a bridge between traditional finance and digital assets, but come with higher costs and risks. They’re ideal for investors seeking:
- Diversification without managing multiple wallets.
- Regulated exposure to crypto price movements.
8. FAQs
Q: Can I buy U.S. crypto ETFs from Europe?
A: Yes, but with high fees and tax complexity.
Q: Are crypto ETPs safer than holding coins directly?
A: No—ETPs add issuer risk but simplify custody.
Q: Which ETP has the lowest fees?
A: CoinShares Physical Bitcoin (0.25% TER).