What you should know about cryptocurrency funds before investing

<p>The long-awaited Bitcoin futures exchange-traded fund (ETF) began trading on the New York Stock Exchange on Tuesday, marking a watershed moment in cryptocurrency's ongoing rollout. The new ETF, dubbed the ProShares Bitcoin Strategy ETF (BITO), joins a small but growing group of funds that provide exposure to digital currency.</p> <p>The new Bitcoin-linked fund enables traders to speculate on Bitcoin without directly purchasing cryptocurrency or opening an account with a cryptocurrency exchange. Investors can purchase and sell the fund in the same way they would any other stock on the exchange, which simplifies the process of getting started.</p> <p>"By opening the doors to mainstream investors through Bitcoin ETFs, a large number of investors can participate in Bitcoin indirectly without actually holding the digital asset, alleviating many newcomers' concerns," says Peter Jensen, CEO of blockchain payments company RocketFuel Blockchain.</p> <p>However, the road to more crypto exchange-traded funds appears to be rocky, according to experts, despite the fact that many fund companies would love a piece of the healthy fees associated with running an ETF based on the trendy asset. And this desire comes at a time when fees on traditional assets such as stocks have been reduced in response to increased competition for new assets.</p> <p>Here are the few crypto ETFs that are currently available, as well as the funds that traders can anticipate in the future.</p> <p>Bitcoin ETFs: The funds that are currently available</p> <p>Bitcoin exchange-traded funds (ETFs) can be classified into two broad categories, depending on how the fund owns the cryptocurrency and provides exposure to investors:</p> <p>—Physical exchange-traded funds (ETFs) that are backed by actual bitcoins</p> <p>—ETFs that invest in crypto futures contracts that are traded on an exchange</p> <p>"At the moment, the SEC is considering the majority of applications for physical ETFs, but there has been an increase in the number of applicants for futu