Cryptocurrency has long ceased to be a market separate from traditional finance. Today, investors do not necessarily need to set up a crypto wallet or understand private keys to gain exposure to Bitcoin, Ethereum, and other digital assets.
This is where crypto ETPs come in — instruments that allow investors to invest in the cryptocurrency market through a conventional stock exchange.
According to 21Shares, by the end of May 2026, cryptocurrency ETPs had around $140 billion in assets under management. Approximately $110 billion of that amount was invested in exchange-traded products linked to Bitcoin.
What is an ETP in crypto?
The abbreviation ETP stands for Exchange Traded Product.
An ETP is a financial instrument that trades on a stock exchange much like a share. However, its value is usually linked not to the business performance of a particular company but to another asset — for example, gold, a stock market index, or cryptocurrency.
In the case of a crypto ETP, the underlying asset may be Bitcoin, Ethereum, Solana, or several cryptocurrencies at once.
Imagine an investor who wants to benefit from an increase in Bitcoin’s price but does not want to buy BTC on a cryptocurrency exchange, create a wallet, and store the coins independently. The investor can buy a Bitcoin ETP through a broker and receive returns that closely track changes in Bitcoin’s price. At the same time, no BTC is transferred to the investor’s own wallet.
Depending on its structure, a crypto ETP may be backed by actual digital assets or track the cryptocurrency market using derivatives, such as futures.
Are ETPs and ETFs the same thing?
ETP is a broad term that covers several types of exchange-traded products. An ETF, or exchange-traded fund, is only one of them.
Simply put: every ETF is an ETP, but not every ETP is an ETF.
The ETP category also includes, for example:
- ETNs — exchange-traded notes representing debt obligations of the issuer;
- ETCs — exchange-traded products traditionally used to gain exposure to commodities.
The same principle applies to the cryptocurrency market.
Crypto ETP is a general term for products whose value is linked to digital assets. At the same time, a specific instrument may legally be structured as a fund, a debt security, or another type of product, depending on the country and the issuer.
How does a Crypto ETP work?
The main difference between a crypto ETP and directly purchasing cryptocurrency is what the investor actually owns.
If a person buys Bitcoin and transfers it to their own wallet, they become the owner of the BTC and control the private keys.
When an investor buys a Bitcoin ETP, the acquire an exchange-traded security whose value is linked to Bitcoin.
Behind the crypto ETP itself, however, is an entire financial infrastructure.
The issuer creates the crypto ETP, a custodian* stores the cryptocurrency backing the ETP, the exchange facilitates trading, market makers maintain liquidity, and specialized companies calculate the value of the crypto ETP and monitor the prices of the underlying cryptocurrency.
* Custodian — a professional organization responsible for the safekeeping and accounting of assets. The reliability of the custodian and the storage infrastructure it uses are among the risk factors associated with a particular crypto ETP.
For the investor, all of this looks fairly simple: they open their broker’s app, find the required cryptocurrency ETP ticker*, and execute a trade in much the same way as when buying an ordinary share.
* Ticker — a unique short designation assigned to a financial instrument on a particular trading venue. Investors can use a ticker to find a share, ETP, or another exchange-traded product in a broker’s terminal. The same financial product may have different tickers on different exchanges, so when selecting an instrument, it is also important to verify its name, ISIN (International Securities Identification Number), and the trading venue where it is listed.
This is precisely one of the main ideas behind crypto ETPs — to bring access to digital assets into the familiar infrastructure of the traditional stock market.
Types of crypto ETPs
The structure of crypto ETPs can vary significantly. Some hold cryptocurrency, others use futures, and still others combine several cryptocurrencies in a single instrument.
Spot crypto ETPs
The simplest structure is a physically backed, or spot*, cryptocurrency ETP.
* Spot market — a market where an asset is bought or sold at the current market price with direct settlement of the transaction. In the context of cryptocurrency, the spot price generally refers to the current price of the coin itself.
If the product tracks Bitcoin, the issuer purchases actual BTC and places it in custody with a professional custodian. Each issued security corresponds to a certain share of those assets.
When Bitcoin rises in value, the crypto ETP generally increases along with it. When BTC falls, the exchange-traded product also declines.
Naturally, the prices may not match perfectly: the result is affected by fees, exchange spreads*, and the expenses of the fund or issuer itself.
* Spread — the difference between the highest price buyers are willing to pay for an asset and the lowest price sellers are willing to accept. A narrow spread generally indicates higher market liquidity, while a wider spread increases the investor’s actual costs when buying and selling.
Nevertheless, this structure is the closest to directly purchasing cryptocurrency in terms of price performance.
Futures-based crypto ETPs
Here, the structure is more complicated: instead of purchasing actual Bitcoin or Ethereum, the issuer uses futures contracts.
A futures contract is an agreement to buy or sell an asset in the future under predetermined terms. These contracts have their own market value and may deviate from the cryptocurrency’s current price.
As a result, a futures-based crypto ETP may behave differently from the underlying asset itself. This becomes particularly noticeable when contracts are regularly rolled over.
If future-dated futures contracts trade above the spot market price, this creates contango. When investors must repeatedly buy more expensive contracts, the investor effectively incurs additional costs.
The opposite situation is called backwardation — futures trade below the asset’s current price.
For this reason, a futures-based crypto ETP may deliver a result that differs noticeably from the simple price movement of Bitcoin or Ethereum.
Index and basket ETPs
Not all investors want to bet on a single cryptocurrency. For them, crypto ETPs can contain an entire basket of digital assets. For example, one crypto ETP may simultaneously include Bitcoin, Ethereum, XRP, and Solana.
The logic is similar to that of a stock index: instead of choosing one coin, the investor immediately gains exposure to several major cryptocurrencies.
This reduces the extent to which the investment result depends on the performance of a single project. If one cryptocurrency declines, growth in another may partially offset the loss.
However, such a portfolio should not be considered protection against a broader cryptocurrency market downturn. During major crypto market corrections, most leading coins often move in the same direction — downward.
Staking crypto ETPs
Some cryptocurrencies offer another potential source of returns — staking.
Networks using a Proof-of-Stake consensus mechanism use staking. Coin owners who temporarily lock up their coins to stake help maintain the blockchain and receive rewards in return.
Normally, users handle staking themselves. However, some crypto ETPs have the issuer or a specialized operator perform this task.
As a result, the investor gains not only exposure to the cryptocurrency’s price but also the economic benefits generated by staking.
How this income is distributed depends on the specific crypto ETP: it may increase the product’s value or partially offset the management fee.
Why investors choose crypto ETPs
The main advantage of crypto ETPs is simplicity.
To buy Bitcoin independently, an investor needs to choose a cryptocurrency exchange, register, understand how withdrawals work, create a wallet, and store the seed phrase securely.
With a crypto ETP, the process is considerably shorter: the investor only needs a brokerage account and access to the stock exchange where the product is traded.
This is particularly convenient for investors who already work with stocks, bonds, and funds and don't want to build separate infrastructure solely for cryptocurrency.
Another important consideration is custody.
With a physically backed crypto ETP, a professional custodian holds the cryptocurrency. The investor does not need to worry about losing a private key or seed phrase.
However, this same feature is also a disadvantage.
What risks do crypto ETPs carry?
By using a crypto ETP, an investor effectively exchanges one set of risks for another.
When holding cryptocurrency directly, investors are responsible for the security of their coins themselves. Losing a private key may result in an irreversible loss of funds.
With a crypto ETP, private keys are held by a professional organization, but the investor becomes dependent on the issuer, the custodian, and the legal structure of the product.
The investor does not directly control the underlying coins.
Convenience also comes at a cost. Most crypto ETPs charge a management fee, which gradually reduces the value of the position.
Some products also experience what is known as tracking error*: the performance of the crypto ETP differs slightly from that of the underlying cryptocurrency.
* Tracking error — the degree to which the performance of an exchange-traded product deviates from the performance of the underlying asset or index it is designed to replicate. Possible causes include fees, management expenses, trading costs, and the methods used to calculate the product’s value.
And, of course, eliminating the need to store private keys does not eliminate the main risk of the crypto market — the high volatility of digital assets.
If Bitcoin loses 20–30% of its value over a short period, an exchange-traded product tracking BTC will also decline significantly.
ETP or actual cryptocurrency?
It all depends on why the investor needs the digital asset.
If the primary goal is to gain financial exposure to a cryptocurrency’s price increase or decrease, a crypto ETP may be a convenient option.
The purchase is made through a familiar broker, the asset appears alongside other securities, and custody is handled by specialized infrastructure.
However, this is essentially where the capabilities of a crypto ETP holder end.
You can't send a Bitcoin ETP to another cryptocurrency address. An Ethereum ETP cannot be connected to a DeFi protocol. It cannot be used to pay for goods or interact with a decentralized application.
An owner of actual cryptocurrency can do all of these things directly.
For example, they can stake ETH or SOL, provide liquidity, take out loans in DeFi, or transfer coins between wallets.
A cryptocurrency ETP, by contrast, keeps the investor within the traditional financial system.
That is why choosing between the two formats isn't just a question of returns. In essence, the investor is choosing between the convenience of the traditional market and the ability to control and use a digital asset independently.
What crypto ETPs already exist?
Over the past few years, the crypto ETP market has grown significantly. By the beginning of 2026, hundreds of cryptocurrency ETPs were already available worldwide.
21Shares offers one of the broadest product ranges. The company issues crypto ETPs linked to Bitcoin, Ethereum, Solana, XRP, Dogecoin, Hyperliquid, and other digital assets.
CoinShares also offers cryptocurrency ETPs linked to Bitcoin and Ethereum, staking solutions, and index ETPs combining several cryptocurrencies.
Some of the world’s largest asset management companies have also entered the market.
For example, BlackRock launched the iShares Bitcoin ETP — a physically Bitcoin-backed product traded on several European exchanges.
Valour is also actively expanding its crypto ETP lineup, offering dozens of products linked to individual cryptocurrencies, indices, and staking-enabled assets.
As a result, the boundary between the traditional investment market and the cryptocurrency industry is blurring.
The bottom line
A crypto ETP can be seen as a bridge between two financial worlds.
On one side is the crypto market, with Bitcoin, Ethereum, blockchain, wallets, and DeFi. On the other is the traditional exchange infrastructure, with brokers, custodians, and regulated trading venues.
Crypto ETPs connect these two models: investors can access the price movements of digital assets while interacting with them in the familiar format of an exchange-traded security.
The convenience comes at the cost of fees and giving up direct control over the cryptocurrency. That is why, before buying, investors should look not only at the name of the underlying asset but also at the structure of the crypto ETP itself: what backs it, who holds the assets, how much management costs, and how accurately the cryptocurrency ETP tracks the market.
These details often matter more than the words Bitcoin or Ethereum in the product’s name.