What are crypto ETFs and how to buy them in Australia

Crypto ETFs provide a way for investors to gain exposure to digital assets like Bitcoin and Ethereum. Instead of buying cryptocurrencies through a crypto exchange, investors can buy and sell crypto ETF units through a stockbroking platform, with no wallets, private keys or separate accounts needed. 

Looking to understand what crypto ETFs are and how they work? This guide covers everything you need to know, including the different types available and how to buy crypto in Australia with CMC Invest. 

Key takeaways

• A crypto ETF tracks the price of one or more cryptocurrencies, or invests in crypto-related companies. 

• Crypto ETFs are traded on stock exchanges, so investors can gain exposure to digital assets without having to own or manage them. 

• Some of the different types of crypto ETFs include spot crypto ETFs, futures-based crypto ETFs and blockchain/crypto industry ETFs. 

• Popular ASX and Cboe-listed crypto ETFs include BetaShares Crypto Innovators (CRYP), Global X 21Shares Bitcoin ETF (EBTC), Global X 21Shares Ethereum ETF (EETH) and VanEck Bitcoin ETF (VBTC). 

• Investing in crypto ETFs carries risks, including market volatility, management fees, lack of ownership and regulatory uncertainty. 

• CMC Invest is a platform through which investors can access crypto ETFs and a range of ASX-listed ETFs and cryptocurrencies, subject to individual suitability and risk tolerance. 

• Through CMC Invest, investors can also access globally listed crypto ETFs such as US-listed Bitcoin and Ethereum ETFs, giving greater flexibility in choosing providers and exposures. 

What is a crypto ETF? 

A crypto ETF is an exchange-traded fund that tracks the price of a single cryptocurrency (e.g. Bitcoin or Ethereum) or a basket of cryptocurrencies. Some crypto ETFs hold the underlying digital asset (aka spot ETFs), whereas others gain exposure through derivatives like futures contracts. 

Crypto ETFs are listed on stock exchanges and can be bought and sold during market hours, just like ordinary shares or other ETFs. If you’re just starting out, make sure you read our guide on how to invest in ETFs. 

How do crypto ETFs work? 

Crypto ETFs work in a similar way to other exchange-traded funds. A fund provider creates the ETF, which holds either the cryptocurrency itself or derivative contracts linked to its price. Investors buy units through a stockbroking platform and the unit price moves in line with the value of the underlying asset. 

Having this type of setup means investors can be exposed to cryptocurrency price movements without needing to create a crypto wallet or handle private keys. Everything is managed through a regulated investment platform. 

Types of crypto ETFs in Australia 

Spot crypto ETFs 

Spot crypto ETFs hold the actual cryptocurrency in secure cold storage on behalf of investors. The ETF’s unit price tracks the spot price of the underlying digital asset in Australian dollars. 

Blockchain and crypto industry ETFs 

Blockchain and crypto industry ETFs invest in companies that work within the digital asset world, such as crypto exchanges, mining firms and blockchain technology providers. Instead of tracking the price of a specific cryptocurrency, these ETFs provide exposure to the wider crypto industry. 

Crypto ETFs by asset type 

Bitcoin ETFs

Bitcoin ETFs track the price of Bitcoin, which is one of the largest cryptocurrencies by market capitalisation. They either hold actual Bitcoin (spot) or gain exposure through futures contracts. Bitcoin ETFs are among the most widely available crypto ETF types in Australia and appeal to investors who see Bitcoin as a potential store of value. To learn more, explore our guide on how to buy Bitcoin in Australia. 

Ethereum ETFs

Ethereum ETFs track the price of Ether (ETH). As the native cryptocurrency of the Ethereum blockchain, it’s used for decentralised finance (DeFi), smart contracts, NFTs and more. Ethereum ETFs may appeal to investors seeking exposure to the Ethereum ecosystem, though suitability will depend on individual circumstances, risk tolerance, and investment objectives. 

Multi-cryptocurrency ETFs

Multi-cryptocurrency ETFs track a basket of digital assets, which may offer a degree of diversification within the crypto asset class. Spreading exposure across multiple cryptocurrencies means these ETFs may reduce concentration risk relative to holding a single digital asset, though this does not eliminate the risks associated with investing in cryptocurrencies generally. 

Why crypto ETFs are a popular investment among Australian investors 

• Portfolio diversification: Crypto ETFs allow investors to gain exposure to digital assets as part of a broader investment portfolio without the operational complexity of directly managing cryptocurrencies.  

• Convenience: Crypto ETFs are traded on traditional stock exchanges, so investors can buy and sell through a standard brokerage account. There’s no need to set up a separate crypto wallet or manage private keys. 

• Liquidity: For investors who prefer a more structured trading environment, ASX and Cboe-listed ETFs operate during regular market hours, which some may find more familiar than direct cryptocurrency exchanges. 

• Professional management: Passive crypto ETFs are supervised by investment professionals, with regulated custodians responsible for securing the underlying assets. 

Top crypto ETFs in Australia listed on the ASX 

While not an exhaustive list, here are some options available to investors interested in crypto ETFs in Australia. 

1. BetaShares Crypto Innovators ETF (ASX: CRYP) 

CRYP has indirect exposure to the cryptocurrency market as it invests in global companies involved in the digital asset industry, including crypto exchanges, mining firms, blockchain technology providers and more. Unlike spot crypto ETFs, CRYP doesn’t hold underlying Bitcoin or Ethereum. 

CRYP’s management fee is 0.67% per annum. It was the first crypto ETF to list on the ASX and may be of interest to investors seeking exposure to the broader crypto industry without directly holding digital assets. 

2. Global X 21Shares Bitcoin ETF (EBTC) 

EBTC is a spot Bitcoin ETF that tracks the price of Bitcoin in Australian dollars. It’s physically backed, with Bitcoin held in cold storage by Coinbase Custody. EBTC has a management fee of 0.45% per annum. 

EBTC offers direct exposure to Bitcoin’s price movements through a regulated product. It trades on Cboe Australia and can be purchased through platforms like CMC Invest. 

3. Global X 21Shares Ethereum ETF (EETH) 

EETH is Australia’s first spot Ethereum ETF. Like EBTC, it’s physically backed with holdings secured by Coinbase Custody and has a management fee of 0.45% per annum. 

This crypto ETF may be a good match for investors interested in Ethereum’s growing role in decentralised finance and smart contracts, but instead of owning it directly, you do so through a regulated ETF structure.

4. VanEck Bitcoin ETF (ASX: VBTC) 

VBTC was the first Bitcoin ETF to list on the ASX. It operates as a feeder fund (a fund that invests in another underlying fund) to the US-listed VanEck Bitcoin Trust (HODL). With this structure, VBTC provides indirect exposure to Bitcoin, with returns also influenced by movements in the AUD/USD exchange rate. Its management fee is 0.49% per annum. 

VBTC is an ASX-listed product managed by VanEck, a provider with an established history in ETF management. Investors should review the product's structure and consider whether it is appropriate for their circumstances.  

A note on international crypto ETFs 

While some investors focus on ASX and Cboe-listed crypto ETFs, CMC Invest also provides access to a wide range of internationally listed crypto ETFs, including well-known US-listed products such as BlackRock’s spot Bitcoin and Ethereum ETFs (e.g. IBIT and ETHA). This broader access gives investors greater control over which fund provider, structure and market they choose when gaining exposure to digital assets. 

CMC Invest also offers the ability to invest in selected cryptocurrencies, such as Bitcoin and Ethereum, within the same platform. This gives investors flexibility to choose how they access crypto markets, whether through ETFs or crypto investments, depending on their preferences and approach.

How to buy crypto ETFs in Australia: Step-by-step guide

1. Open an account with CMC Invest: You can open an account with CMC Invest to access ASX and Cboe-listed ETFs, as well as international markets.  

2. Research crypto ETFs: Use CMC Invest tools like Market News and the Knowledge Hub to compare different crypto ETFs, while also factoring in the type of exposure (spot, futures or industry), management fees, fund size and liquidity. 

3. Place your order: Search for your preferred crypto ETF by its ticker code (e.g. CRYP, EBTC, EETH or VBTC), read the PDS, review the latest announcements, familiarise yourself with all the fees and then place your order. 

Risks and considerations when buying crypto ETFs

• Management fees: Fees for crypto ETFs depend on the product itself, so make sure you do your research. Also, remember that these fees will reduce your returns over time. 

• Market volatility: Cryptocurrencies are among the most volatile asset classes available, with prices swinging dramatically in short periods of time. As such, the value of your investment can go down quickly as well as up. 

• Lack of direct ownership: When you invest in a crypto ETF, you don’t own the underlying cryptocurrency. Instead, you own units in a fund, which means you can’t transfer, spend or use the digital assets yourself. 

• Regulatory risks: The regulatory environment for cryptocurrencies and crypto ETFs continues to change in Australia and around the world. New legislation could affect the availability and pricing of crypto ETFs. 

Conclusion

Crypto ETFs in Australia offer a regulated way for investors to access digital asset exposure without the need to directly buy, store, or manage cryptocurrencies themselves. Whether you’re interested in spot Bitcoin and Ethereum ETFs or industry-focused funds, there are a number of options available, and investors are encouraged to review each product's PDS and consider their own circumstances before investing. 

CMC Invest provides you access to a wide range of ASX-listed ETFs and cryptocurrencies, along with research tools and educational resources to help inform your investment decisions. 

Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information and education purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment, tax or other advice on which reliance should be placed and is warranted to be complete, accurate, or timely. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

Investing in cryptocurrencies carries significant risks and is not suitable for all investors. You may lose all your money you paid. Consequently, you should consider the information in light of your objectives, financial situation and needs and do your own research. It’s important for you to consider the relevant Digital Assets Terms of Service and other associated disclosure documents on the CMC Markets Invest website before you decide whether or not to acquire any of the Cryptocurrencies. Please also note that you are not currently able to send Cryptocurrencies to or from your trading account, or use Cryptocurrencies purchased on CMC Markets’ Platform to pay for goods or services.

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