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As someone who never owned cryptocurrency and frankly never cared that much: could you ELI5 the idea of a Bitcoin ETF? Is it just a vehicle to trade Bitcoin (as in a single cryptocurrency; BTC) on a normal stock exchange? Is it an index-weighted portfolio of BTC and other (e.g. Ethereum)? Does the fund actually own BTC or is it technically a derivative like a synthetic (regular) ETF?

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> Is it just a vehicle to trade Bitcoin (as in a single cryptocurrency; BTC) on a normal stock exchange?

Yes

> Is it an index-weighted portfolio of BTC and other (e.g. Ethereum)?

No

> Does the fund actually own BTC or is it technically a derivative like a synthetic (regular) ETF?

Yes, a spot ETF is backed by "physical" Bitcoin

How is it "physical" when it is only an IOU from Coinbase?

Retail stocks are usually held in street name. That system seems to be working.

The most talked about "Bitcoin ETF" is the one Blackrock filed an application for. I think it is this one:

https://www.sec.gov/Archives/edgar/data/1980994/000143774923...

My reading of it is that it will only cointain Bitcoin.

And that they will not actually own it (as in control it) but only own an email (or whatever paperwork) from Coinbase (or whoever the "custodian" will be) saying that Coinbase holds Bitcoin for the ETF. But I'm not sure. Happy to hear interpretations by others.

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