What Crypto ETFs Mean for Corporate Investors

The UK’s Financial Conduct Authority recently announced plans to lift the ban on cryptocurrency Exchange Traded Notes, bringing it closer to the US in terms of regulation and crypto development.

It stopped short of suggesting ETFs would also be permitted but did declare that crypto derivatives would still remain under embargo. The US has permitted the sale and purchase of Bitcoin spot ETFs since January 2024, enabling commercial and retail investors an easier, safer way to invest in the cryptocurrency.

Cryptocurrency Use

Cryptocurrency’s main use is as a form of investment, despite different currencies being launched for different purposes. Established coins like Bitcoin, Ethereum, and Litecoin, offer investors long-term positions, while with the many new meme coins 2025 has to offer, investors have the potential to enjoy massive returns on relatively small investments.

While these new coins do have huge upside potential, crypto expert Tony Frank warns that most of them fail to deliver profits to investors, no matter how early they get in.

Bitcoin Prices

While the likes of Bitcoin and Ether may not have the same profit potential as newer and riskier coins, they still have high levels of volatility, which means they still have the potential for handsome profits, especially when compared to traditional forms of investment. In the last year alone, Bitcoin has risen from $67,000 to its current price of $105,000, representing a 57% return.

Investors would be hard-pressed to find many stocks or other forms of investment that have shown the same profits. Furthermore, Bitcoin is still in its infancy and many commentators expect its price to continue rising, especially as governments, banks, and institutions pour investment into it.

Some, albeit optimistic, analysts predict a price of $1m within the next couple of years. With these kinds of price estimates, it is easy to understand why any investor would be interested in the cryptocurrency asset class.

Easier Acquisition And Storage

However, one aspect of cryptocurrency investment that deters a lot of investors is its difficulty in purchasing and holding it. Buying stock is relatively easy through a broker or exchange. Buying cryptocurrency means setting up an exchange account, which is similar to share or foreign currency trading, but the storage of cryptocurrency is more difficult.

Buyers need to securely store their private cryptocurrency keys. Low-level investors may store their keys in a software wallet, while bigger individual investors may opt for a hardware wallet. Institutional and commercial investors require a more secure solution, which comes in the form of custodial services.

Custodial services can be expensive. Investing in a Bitcoin ETF means that the fund manager is responsible for this.

Easier Accessibility

The ETF shares can be traded using a regulated exchange. Oftentimes, these ETFs are available through the same platforms as investors use to buy and sell stock. This accessibility is another benefit of buying ETFs rather than directly dealing in cryptocurrencies.

Commercial investors generally have accounts with brokers or exchanges already, and ETFs can be treated in much the same way as those stocks.

Regulatory Oversight

Where ETFs are available, and certainly in the US, they are overseen by regulatory bodies. This oversight doesn’t guarantee any kind of success and it won’t ensure the ETFs generate returns, but it does provide certain assurances. One such assurance is that spot ETF funds must purchase the underlying asset.

This means there is an assurance of value behind the ETF. The funds must also be traded through exchanges and other services that are approved and licensed by the regulatory body, which can remove the threat of fraudulent and unsafe exchange practices, which are regrettably still too common in cryptocurrency.

Potential For Profit

While ETFs are easier and more accessible than buying and holding Bitcoin directly, they still expose the investor to the same volatility as the cryptos themselves. This means that ETFs have the potential to lose value, just like Bitcoin does.

It also means that the funds also have the possibility of increasing in value. 2024 saw Bitcoin more than double in value. Similarly, 2023 saw Bitcoin add more than 100% to its price.

Such returns aren’t unusual, and there is at least a chance that the cryptocurrency will continue to see these kinds of returns, although prices have stalled a little over the past few months.

A Diverse Investment Portfolio

Diversification is key to a successful investment portfolio with less risk. Cryptocurrency is a high-risk asset class, but it can perform well when traditional investments are finding the going difficult. High-risk assets generally only take up a relatively small portion of a portfolio, although it depends on the investor’s risk adversity level.

A Diverse Cryptocurrency Portfolio

This diversification also goes for a crypto portfolio itself. Bitcoin can be considered one of the safer crypto assets, especially when compared to meme coins and other smaller market-cap coins. Therefore, it is common for crypto investors to hold a large portion of their overall portfolio as Bitcoin while treating the rest of their portfolio as being more liquid. Investing in an ETF makes long-term holding easier.

And, Bitcoin ETFs have already been joined by Ether ETFs. There is a widespread belief that other cryptos will follow, with Solana and Ripple being two of the most likely. Eventually, more and more cryptos will have their own ETFs, and we will see spot cryptos that hold baskets of diverse cryptocurrencies.

Get In On The Ground Level

Cryptocurrency is still a disruptive technology and while the market has matured over the years, it still has a long way to go. Many people have put off its acquisition and use due to its volatility, as well as the difficulty associated with buying and storing crypto.

But, more and more people are coming around to its use, and as more people do buy into Bitcoin, its increased popularity will see enhanced technology and even more price increases. Early investors are those that will benefit most.