Bitcoin has evolved from a niche digital experiment into a mainstream financial asset, attracting both retail and institutional investors. One of the most accessible ways to gain exposure to Bitcoin without directly holding the cryptocurrency is through exchange-traded products—specifically Bitcoin ETFs (Exchange-Traded Funds) and ETNs (Exchange-Traded Notes). While structurally different, both offer regulated, exchange-listed investment vehicles that track Bitcoin’s price.
This guide breaks down everything you need to know about Bitcoin ETFs and ETNs, compares top-performing options, explains regional differences, and helps you choose the best product for your investment goals in 2025.
Understanding Bitcoin ETFs and ETNs
Bitcoin is a decentralized digital currency that operates on a blockchain—a distributed ledger maintained by a network of computers. Unlike traditional currencies, it isn’t issued or controlled by any central authority. Since its launch in 2009, Bitcoin has gained popularity as both a speculative asset and a potential hedge against inflation.
Investing directly in Bitcoin requires managing private keys and using cryptocurrency exchanges, which can be complex and risky for many investors. Exchange-traded products simplify this process by offering regulated, brokerage-accessible instruments that mirror Bitcoin’s price movements.
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What Is a Bitcoin ETF?
A Bitcoin ETF is a fund traded on traditional stock exchanges that aims to track the spot price of Bitcoin. In early 2024, the U.S. Securities and Exchange Commission (SEC) approved the first wave of spot Bitcoin ETFs, including major offerings from BlackRock (iShares Bitcoin Trust) and Fidelity. These funds hold actual Bitcoin in secure custody and allow investors to gain exposure through familiar brokerage accounts.
Key benefits:
- Regulated and transparent
- No need to manage digital wallets
- Accessible through standard investment platforms
However, these U.S.-listed ETFs are not authorized for public distribution in Europe, limiting direct access for EU investors.
What Is a Bitcoin ETN?
In Europe, due to UCITS regulations requiring diversification, true Bitcoin ETFs cannot be issued. Instead, investors use Bitcoin ETNs (Exchange-Traded Notes)—debt securities issued by financial institutions that replicate the performance of Bitcoin.
Most European Bitcoin ETNs are physically backed, meaning the issuer holds actual Bitcoin reserves. While they function similarly to ETFs in practice, ETNs carry issuer credit risk, though this is generally low with reputable providers.
Despite structural differences, for most investors, Bitcoin ETNs serve as the European equivalent of U.S. spot Bitcoin ETFs.
Key Differences Between Bitcoin ETFs and ETNs
| Feature | Bitcoin ETF (U.S.) | Bitcoin ETN (Europe) |
|---|---|---|
| Regulatory Framework | SEC-approved (U.S.) | Issued under European securities law |
| Structure | Fund holding physical Bitcoin | Unsecured debt note linked to Bitcoin |
| Investor Protection | High (regulated fund structure) | Moderate (exposure to issuer risk) |
| Availability in Europe | Not officially distributed | Widely available on European exchanges |
| Tax Treatment (Germany) | Capital gains taxed annually | May qualify for tax exemption after 1 year |
While both products aim to reflect Bitcoin’s price, European investors primarily rely on ETNs due to regulatory constraints.
Top Bitcoin ETNs in Europe: Performance and Fees
For European investors, choosing the right Bitcoin ETN involves evaluating total expense ratio (TER), fund size, replication method, and tax efficiency.
Below are some of the leading physically backed Bitcoin ETNs available in 2025:
- WisdomTree Physical Bitcoin (GB00BJYDH287) – TER: 0.15% p.a., Fund Size: €1.03B
- CoinShares Physical Bitcoin (GB00BLD4ZL17) – TER: 0.25% p.a., Fund Size: €1.52B
- 21Shares Bitcoin Core ETP (CH1199067674) – TER: 0.21% p.a., Fund Size: €347M
- Invesco Physical Bitcoin (XS2376095068) – TER: 0.25% p.a., Fund Size: €334M
- iShares Bitcoin ETP (XS2940466316) – TER: 0.15% p.a., Fund Size: €292M
These products are all physically backed, meaning they hold real Bitcoin in cold storage, minimizing tracking error.
Performance Comparison (1-Year Return)
Most top-tier ETNs show nearly identical returns over one year—between 58% and 61%—reflecting their close alignment with Bitcoin’s price. Slight differences arise from fees and custody practices.
👉 Compare real-time performance of leading crypto investment products.
Frequently Asked Questions (FAQ)
Q: Can I buy U.S. Bitcoin ETFs in Europe?
A: While not officially distributed in the EU, some European brokers provide access to U.S. spot Bitcoin ETFs like the iShares Bitcoin Trust. However, tax treatment may be less favorable—especially in Germany, where gains don’t qualify for the one-year tax exemption available with certain ETNs.
Q: Are Bitcoin ETFs safer than holding crypto directly?
A: Yes, for many investors. ETFs eliminate the risks of lost keys, exchange hacks, or mismanagement. They offer institutional-grade custody and regulatory oversight, making them a more secure option for long-term exposure.
Q: Do Bitcoin ETNs pay dividends?
A: No. Since Bitcoin itself doesn’t generate income, these products are typically accumulating (thesaurierend), reinvesting any minor yield from staking or lending activities into additional holdings.
Q: How do I start investing in a Bitcoin ETN?
A: Open a brokerage account or depot with a platform offering ETF trading. Many European brokers—such as Scalable Capital, Trade Republic, or ING—offer zero-fee ETF savings plans starting at €1 per month.
Q: Is there a risk the issuer could default on a Bitcoin ETN?
A: ETNs are unsecured debt instruments, so there is counterparty risk. However, major issuers like WisdomTree, CoinShares, and Invesco have strong credit ratings and transparent structures, minimizing this concern.
Q: What are the tax implications of investing in Bitcoin ETNs in Germany?
A: If held for more than one year, capital gains from certain ETNs are tax-free under German law. This does not apply to U.S.-listed ETFs, which are treated as foreign funds subject to annual Abgeltungsteuer regardless of holding period.
How to Invest via ETF Savings Plans
One of the smartest ways to invest in Bitcoin is through a regular savings plan (ETF-Sparplan). This approach leverages dollar-cost averaging, reducing volatility risk and building wealth gradually.
Many European brokers now offer:
- Zero transaction fees on selected ETNs
- Minimum investments from €1 per month
- Automatic monthly purchases
Top platforms with free savings plans include:
- Scalable Capital
- Trade Republic
- ING
- Comdirect
For example:
- The WisdomTree Physical Bitcoin ETP offers a 0.15% annual fee and is available via 6+ brokers with free savings plans.
- The CoinShares Physical Bitcoin ETP has the largest fund size (€1.5B+) and is accessible through multiple zero-fee plans.
Using an ETF savings plan makes it easy to build long-term exposure to Bitcoin without timing the market.
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Final Thoughts: Which Is the Best Option?
There is no single "best" Bitcoin ETF or ETN—the ideal choice depends on your location, tax situation, and investment preferences.
- U.S. Investors: The iShares Bitcoin Trust (IBIT) stands out due to its massive inflows post-launch, strong brand backing from BlackRock, and low fees.
- European Investors: Focus on low-cost, physically backed ETNs like WisdomTree Physical Bitcoin or 21Shares Bitcoin Core ETP, especially if you benefit from long-term tax exemptions.
- Cost-Conscious Savers: Prioritize products available through zero-fee savings plans, such as those offered by CoinShares or Invesco.
Regardless of which product you choose, investing via regulated exchange-traded instruments remains one of the safest and most convenient ways to gain exposure to Bitcoin in 2025.
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