I just saw many of you asking about what Bitcoin ETFs and ETPs are, so I’d like to share a bit of my understanding of these two concepts.

Let’s start with ETF first. It stands for Exchange Traded Funds, meaning funds that can be traded on the exchange just like stocks. Its operation is quite simple—you can imagine it as a basket of selected stocks based on a particular index. For example, the SPY ETF is the world’s largest fund tracking the S&P 500 index; it will include stocks of 500 companies in that index. When you buy an ETF, you don’t actually directly own those 500 stocks; you only own certificates that indicate you have ownership rights to that fund.

Bitcoin ETF works on a similar principle. It is an ETF that tracks the price of Bitcoin, so when you buy a Bitcoin ETF, you’re investing indirectly in Bitcoin without needing to directly hold Bitcoin. The great thing about it is that your profit will be exactly the same as buying Bitcoin directly—if Bitcoin goes up, the ETF also goes up; if Bitcoin goes down, the ETF also goes down. The biggest advantage is that you don’t have to worry about storing Bitcoin, you don’t have to worry about it being stolen, and you don’t have to go through complicated procedures.

Now let’s move on to ETP, the thing you’re asking about: what is ETP. ETP stands for Exchange Traded Products, meaning products traded on the exchange. They are also traded intraday on stock exchanges, but legally, ETPs are not funds—they are structured debt securities. Their value is linked to underlying assets such as commodities, securities, or some specific index. Essentially, ETPs are a passive investment meant to replicate the performance of a particular market by tracking a benchmark index.

I remember the first time ETPs were applied to cryptocurrencies was in November 2018, when the Swiss Securities Trading Platform launched Amun ETP—that was the world’s first multi-cryptocurrency ETP. It tracks the Amun Crypto Basket Index, which includes five leading cryptocurrencies by market capitalization: BTC accounts for 49,7%, XRP 25,4%, ETH 16,7%, LTC 3% and BCH 5,2%. What’s interesting is that Switzerland’s financial regulator Finma emphasized the difference between ETP and ETF, because ETPs are not subject to regulation under the Collective Investment Schemes Act.

When comparing these two, both ETF and ETP help investors access the cryptocurrency space more easily without having to worry about custody or legal barriers. But the main difference is that ETFs are funds, while ETPs are bonds, so ETFs require stricter oversight. That’s also why the SEC has repeatedly rejected applications for Bitcoin ETF licenses—they require the cryptocurrency futures market to be sufficiently stable. ETPs don’t have such requirements, because Hoa Kỳ already has ETP products, for example Grayscale’s Bitcoin Investment Trust.

Overall, both are good tools for investors to participate in the cryptocurrency market more safely. What do you think about Bitcoin ETF and ETP? Share your thoughts, too.