Which countries or regions around the world have approved currency ETFs?

Canada paved the way for cryptocurrency ETFs, approving the Purpose Bitcoin ETF (BTCC) in February 2021, providing Canadian investors with exposure to the price of Bitcoin.

Jan 08, 2025 at 01:49 pm

Key Points:

• Overview of Cryptocurrency ETFs
• Countries that Have Approved Currency ETFs
• Benefits and Challenges of Cryptocurrency ETFs
• Future Prospects for Cryptocurrency ETFs

Countries that Have Approved Currency ETFs

Canada:

• Canada was the first country to approve a cryptocurrency ETF in February 2021.
• The Purpose Bitcoin ETF (BTCC) provides exposure to the price of Bitcoin.
• Canadian investors have access to a range of cryptocurrency ETFs, including those focused on Ethereum, Litecoin, and other digital assets.

United States:

• The first Bitcoin futures ETF was approved in the U.S. in October 2021, followed by several other Bitcoin and Ethereum futures ETFs.
• U.S. regulators have been cautious in approving spot cryptocurrency ETFs, citing concerns about market volatility and manipulation.
• However, there are proposals for spot cryptocurrency ETFs under consideration by the SEC.

Brazil:

• Brazil approved two cryptocurrency ETFs in November 2021:

  • QBTC11, which invests in Bitcoin futures
  • HASH11, which invests in a basket of cryptocurrencies, including Bitcoin, Ethereum, and others

Germany:

• Germany approved its first cryptocurrency ETF in June 2021, traded on the Deutsche Börse Xetra exchange.
• The ETF, issued by 21Shares, tracks the performance of the Solactive Crypto Index, which includes Bitcoin, Ethereum, Ripple, Litecoin, and Cardon.

Europe (excluding Germany):

• Several countries in Europe, including Switzerland, France, Belgium, and the Netherlands, have approved cryptocurrency ETFs, primarily tracking the performance of Bitcoin or Bitcoin futures.

Asia:

• South Korea approved the first cryptocurrency ETF in Asia in January 2023.
• The ETF tracks the price of Bitcoin and is managed by Samsung Asset Management.
• Other Asian countries, such as Japan, Hong Kong, and Singapore, are considering cryptocurrency ETFs but have yet to approve any.

Benefits of Cryptocurrency ETFs

• Accessibility: ETFs make it easier for investors to access cryptocurrencies without directly owning or trading them.
• Regulation: ETFs are regulated by financial authorities, providing investors with some level of protection.
• Diversification: ETFs provide exposure to a basket of cryptocurrencies, reducing the risk associated with individual digital assets.

Challenges of Cryptocurrency ETFs

• Volatility: Cryptocurrencies are highly volatile, and ETF investors should be aware of the potential for significant price swings.
• Fees: ETF fees can eat into potential returns, especially for passively managed funds.
• Lack of Spot Exposure: Most ETFs currently available track futures contracts or derivatives, rather than spot prices. This may limit the potential returns for investors.

FAQs

• What is the largest cryptocurrency ETF in the world?

  • The Purpose Bitcoin ETF (BTCC) is the largest cryptocurrency ETF globally, with over $1 billion in assets under management.

• Which country has the most cryptocurrency ETFs?

  • Canada currently has the most approved cryptocurrency ETFs among all countries.

• Will there be more cryptocurrency ETFs approved in the future?

  • It is likely that more countries will approve cryptocurrency ETFs in the future as the industry matures and regulation improves.