Best Crypto ETFs to Diversify Your Portfolio in 2025

·

Cryptocurrency investing has evolved rapidly, and one of the most accessible ways to gain exposure to digital assets is through crypto ETFs (exchange-traded funds). These investment vehicles offer a streamlined, regulated, and diversified approach to participating in the crypto market — without the need to manage private keys or navigate volatile exchanges.

While platforms like Binance, Bybit, and Kraken have simplified direct crypto trading, they also expose investors to high volatility and security risks. Crypto ETFs provide a compelling alternative by offering diversified exposure, lower operational complexity, and enhanced regulatory oversight.

In this guide, we’ll explore the top crypto ETFs available today, break down how they work, and help you understand which ones might best align with your investment strategy. Let’s dive in.

What Are Crypto ETFs?

A crypto ETF is an exchange-traded fund that tracks the performance of one or more cryptocurrencies. Think of it as a basket containing digital assets like Bitcoin (BTC) or Ethereum (ETH) — or financial instruments tied to them, such as futures contracts.

Instead of buying Bitcoin directly on a crypto exchange, you can purchase shares of a Bitcoin ETF through your traditional brokerage account. This makes entry into the crypto space much easier for mainstream investors who want exposure without dealing with wallets, exchanges, or custody concerns.

👉 Discover how crypto ETFs simplify digital asset investing with secure, regulated access.

There are two primary types of crypto ETFs:

While both offer crypto exposure, spot ETFs are generally preferred for their direct correlation to current market prices.

Types of Crypto ETFs

Understanding the different structures is key to choosing the right fund.

Spot ETFs

Spot ETFs hold real cryptocurrencies in secure custody. When you invest in a spot Bitcoin ETF, you’re essentially gaining exposure to Bitcoin’s current market price.

The U.S. Securities and Exchange Commission (SEC) approved the first spot Bitcoin ETFs in early 2024, marking a turning point for institutional adoption. Since then, major financial firms like BlackRock and Fidelity have launched their own versions.

This approval opened doors not only for Bitcoin but also for Ethereum spot ETFs, further expanding investor options.

Despite growing momentum, some traditional giants like Vanguard remain cautious, choosing not to enter the crypto ETF space — highlighting ongoing debate about digital assets in conventional finance.

Futures-Based ETFs

These funds don’t hold actual crypto. Instead, they use futures contracts — agreements to buy or sell an asset at a predetermined price on a future date.

Because futures prices can differ from spot prices (a phenomenon known as contango), these ETFs may underperform over time due to rollover costs when contracts expire and new ones are purchased.

They’re often used by traders seeking short-term exposure rather than long-term holders.

Leveraged ETFs

Leveraged crypto ETFs use financial derivatives and debt to amplify returns. For example, a 2x Bitcoin futures ETF aims to return twice the daily performance of Bitcoin.

However, due to daily rebalancing, these funds can deviate significantly from long-term crypto price movements. As such, they’re better suited for experienced traders with short-term strategies — not buy-and-hold investors.

Top Crypto ETFs in 2025

Let’s examine some of the most prominent crypto ETFs shaping the market this year.

iShares Bitcoin Trust (IBIT)

Backed by the world’s largest asset manager, IBIT quickly became a leader among spot Bitcoin ETFs. With one of the lowest expense ratios in the market, it offers cost-efficient access to Bitcoin.

BlackRock has pledged to keep fees low for assets up to $5 billion, making IBIT especially attractive for large-scale investors. It now holds more Bitcoin than even Grayscale’s GBTC, cementing its dominance.

👉 See how top-tier asset managers are integrating Bitcoin into mainstream portfolios.

Bitwise 10 Crypto Index Fund (BITW)

BITW tracks the top 10 cryptocurrencies by market cap, including Ethereum, Solana, and Cardano. It’s actively managed and uses a proprietary “Trendwise” strategy that shifts into Treasuries during market downturns.

Scheduled to convert to a spot ETF around December 3, 2024, BITW could become a powerful tool for diversified crypto exposure.

WisdomTree Managed Futures Strategy Fund (WTMF)

WTMF doesn’t invest directly in crypto but gains exposure through managed futures contracts across commodities, equities, and currencies. Its algorithmic approach rebalances monthly based on momentum signals while filtering out the most volatile contracts.

This makes WTMF ideal for risk-conscious investors seeking indirect crypto exposure within a broader macro strategy.

Invesco Galaxy Bitcoin ETF (BTCO)

BTCO invests directly in physical Bitcoin and uses the Lukka Prime Bitcoin Reference Rate for accurate pricing. Partnering with Galaxy Digital adds deep expertise in digital asset management.

With strong infrastructure and transparent valuation methods, BTCO stands out as a reliable choice for pure-play Bitcoin exposure.

VanEck Bitcoin ETF (HODL)

VanEck was one of the earliest proponents of Bitcoin ETFs and now leads with HODL — a passively managed spot fund. It launched with a record $72.5 million seed investment and donates 5% of profits to Brink, a nonprofit supporting Bitcoin core development.

This blend of financial strength and community commitment makes HODL both profitable and principled.

Franklin Bitcoin ETF (EZBC)

EZBC is a low-cost, passively managed fund designed to mirror Bitcoin’s price performance. In September 2024, it delivered a 7.6% return — earning a "B" grade in its category — showing strong early performance.

Its simplicity and competitive fees make it appealing for both new and experienced investors.

ProShares Bitcoin Strategy ETF (BITO)

As the first U.S.-listed Bitcoin-linked ETF (launched in 2021), BITO paved the way for future products. Though it tracks futures rather than spot prices, its NYSE listing ensures high liquidity.

Ideal for traders wanting quick access, though less efficient for long-term holding due to roll yield drag.

Fidelity Advantage Bitcoin ETF (FBTC)

Fidelity brings its reputation for security and trust to FBTC, which holds actual Bitcoin. However, it trades in Canadian dollars, adding currency conversion considerations for U.S. investors.

Still, its backing by a financial powerhouse provides peace of mind regarding custody and compliance.

Benefits of Crypto ETFs

Crypto ETFs offer several advantages over direct ownership:

For those hesitant about self-custody or unfamiliar with blockchain technology, ETFs lower the barrier to entry significantly.

Key Factors When Choosing a Crypto ETF

Not all crypto ETFs are created equal. Consider these factors before investing:

Investment Goals

Are you aiming for long-term growth or short-term gains? Spot ETFs suit buy-and-hold strategies; leveraged or futures-based funds cater to active traders.

Underlying Holdings

Check what assets the fund holds — just Bitcoin? A basket of altcoins? Ensure alignment with your risk tolerance and market outlook.

Expense Ratio

Lower fees mean more of your returns stay in your pocket. Compare ratios across similar funds — IBIT’s 0.12% is notably competitive.

Liquidity

High trading volume ensures you can enter and exit positions easily without slippage. Look at average daily volume before investing.

Regulatory Environment

Stay informed about evolving regulations in your jurisdiction. Approval of spot ETFs signals growing legitimacy — but rules may change.

Frequently Asked Questions (FAQ)

Q: Are crypto ETFs safe?
A: Yes, especially those regulated by bodies like the SEC. They offer greater investor protection than direct crypto holdings on exchanges.

Q: Can I hold a crypto ETF in my IRA?
A: Some brokerages allow inclusion of crypto ETFs in retirement accounts, but check with your provider for eligibility.

Q: Do crypto ETFs pay dividends?
A: Most do not, as they track asset prices rather than generate income like dividend stocks.

Q: How do spot ETFs differ from futures-based ones?
A: Spot ETFs hold actual crypto and reflect real-time prices; futures-based ones use contracts that can diverge from spot values over time.

Q: Is there tax reporting for crypto ETFs?
A: Yes, but it's simpler than direct crypto trading — treated like any other stock or ETF for tax purposes.

Q: Which is better: GBTC or IBIT?
A: IBIT generally wins on cost (0.12% vs GBTC’s 1.5%) and performance transparency. GBTC remains popular but carries higher fees.

Final Thoughts

Crypto ETFs represent a bridge between traditional finance and the digital asset revolution. With products from trusted names like BlackRock, Fidelity, and VanEck now available, investors have safer, simpler ways to diversify into cryptocurrency markets.

While opportunities abound, remember that all investments carry risk — especially in a rapidly evolving space like crypto. Always conduct thorough research and consult a financial advisor before making decisions.

Whether you're drawn to low-cost leaders like IBIT or socially conscious options like HODL, there's likely a crypto ETF that fits your portfolio goals in 2025.

👉 Start exploring regulated crypto investment opportunities with confidence today.