Investing in Bitcoin has evolved from the technical complexities of direct ownership to more accessible financial products. Exchange-Traded Funds (ETFs) and Exchange-Traded Notes (ETNs) offer a regulated and convenient way to gain exposure to Bitcoin's price movements without dealing with private keys or crypto exchanges. This guide explores the best options available, their key differences, and how to invest wisely.
Understanding Bitcoin and Investment Vehicles
Bitcoin is a decentralized digital currency that operates independently of traditional financial systems. Transactions are verified cryptographically through a peer-to-peer network, eliminating the need for central intermediaries like banks. This system relies on a distributed public ledger called the blockchain.
New Bitcoins are created through a process called mining, which involves solving complex cryptographic puzzles. This process requires substantial computational power and energy. The Bitcoin supply is algorithmically capped, creating a finite digital asset.
How to Invest in Bitcoin Without Direct Ownership
For many investors, buying and storing Bitcoin directly presents challenges like security risks and technical complexity. Bitcoin ETFs and ETNs solve this by offering familiar, exchange-traded instruments that track Bitcoin's price.
- ETFs typically hold the underlying asset directly. In the U.S., spot Bitcoin ETFs hold actual Bitcoin.
- ETNs are debt instruments issued by a financial institution that promise to pay the return of the underlying asset, minus fees.
The Rise of Bitcoin ETFs in the U.S.
In early 2024, the U.S. Securities and Exchange Commission (SEC) approved the first spot Bitcoin ETFs. This landmark decision allowed major asset managers like BlackRock (iShares Bitcoin Trust ETF) and Fidelity (Fidelity Advantage Bitcoin ETF) to offer products that hold physical Bitcoin.
These ETFs differ from previous products that held Bitcoin futures contracts. Spot ETFs provide direct exposure to Bitcoin's price, which many investors prefer. The approval led to significant inflows, with several ETFs quickly accumulating billions in assets under management.
Will Bitcoin ETFs Come to Europe?
Due to the European UCITS regulations, which require a minimum level of diversification, pure Bitcoin ETFs are not permitted in the EU. A fund tracking a single asset like Bitcoin does not meet this requirement. Therefore, European investors rely on Bitcoin ETNs, which function similarly and are often physically backed by Bitcoin.
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Bitcoin ETNs: The European Alternative
Bitcoin Exchange-Traded Notes (ETNs) are the primary vehicle for European investors seeking regulated Bitcoin exposure. Most available ETNs are physically backed, meaning the issuer holds actual Bitcoin to support the note's value.
Key Differences Between ETFs and ETNs
While both trade on exchanges, their structures differ:
- ETFs are investment funds that hold assets.
- ETNs are unsecured debt securities whose value is linked to an underlying index.
For European investors, ETNs provide a practical and accessible way to invest in Bitcoin through traditional brokerage accounts.
Comparing Bitcoin ETNs: Fees and Performance
When selecting a Bitcoin ETN, consider factors like the Total Expense Ratio (TER), fund size, replication method, and domicile. The TER, an annual fee, directly impacts your net return.
Here’s a snapshot of major physically-backed Bitcoin ETNs available to European investors, sorted by fund size:
| ETN Name | ISIN | Fund Size (EUR M) | TER (p.a.) |
|---|---|---|---|
| CoinShares Physical Bitcoin | GB00BLD4ZL17 | 1,517 | 0.25% |
| Bitwise Physical Bitcoin ETP | DE000A27Z304 | 1,115 | 2.00% |
| WisdomTree Physical Bitcoin | GB00BJYDH287 | 1,033 | 0.15% |
| 21Shares Bitcoin ETP | CH0454664001 | 760 | 1.49% |
| VanEck Bitcoin ETN | DE000A28M8D0 | 633 | 1.00% |
| 21Shares Bitcoin Core ETP | CH1199067674 | 347 | 0.21% |
Source: Data as of July 1, 2025. All ETNs are physically backed and use a thesauriating (accumulating) income structure.
Performance can vary slightly between products due to differences in fees and specific tracking methodologies. It's crucial to compare not just past returns but also the cost structure.
Which is the Best Bitcoin ETN?
Identifying the "best" ETN depends on your investment goals. A low-cost option like the WisdomTree Physical Bitcoin (TER: 0.15%) may be suitable for cost-conscious investors. However, larger fund size can sometimes indicate greater liquidity and investor confidence.
Performance Comparison
Short and long-term performance figures help assess an ETN's tracking efficiency. Here are sample returns for a selection of ETNs (in EUR, including dividends):
| ETN Name | 1 Month | 1 Year | 3 Years |
|---|---|---|---|
| Global X Bitcoin ETP | -1.63% | 60.53% | 390.15% |
| CoinShares Physical Bitcoin | -1.58% | 60.10% | 391.16% |
| WisdomTree Physical Bitcoin | -1.57% | 60.09% | 391.03% |
| 21Shares Bitcoin ETP | -2.02% | 58.01% | 373.80% |
Source: Data as of June 30, 2025. Performance figures are illustrative and do not guarantee future results.
Past performance is not a reliable indicator of future returns. Always consider the TER, as a high fee can significantly erode long-term gains.
Investing with Bitcoin ETN Savings Plans
A savings plan (Sparplan) allows you to invest a fixed amount regularly into a Bitcoin ETN, leveraging dollar-cost averaging. This strategy reduces the impact of volatility by spreading purchases over time.
Many online brokers in Europe offer commission-free savings plans for various ETNs, with some allowing you to start with as little as €1 per month.
Benefits of a Savings Plan
- Discipline: Automates regular investing.
- Cost-Effectiveness: Often has low or zero transaction fees.
- Accessibility: Allows investing small, manageable amounts.
Popular brokers like Scalable Capital and Trade Republic provide extensive options for ETN savings plans. The availability of a specific ETN in a savings plan depends on the broker, not the product provider.
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Frequently Asked Questions
What is the difference between a Bitcoin ETF and a Bitcoin ETN?
A Bitcoin ETF is a fund that holds assets (like physical Bitcoin). A Bitcoin ETN is a debt note issued by a bank that promises to pay the return of Bitcoin, minus fees. For investors, the day-to-day trading experience is very similar, but the underlying legal structure and risk profile differ.
Can I buy U.S. Bitcoin ETFs in Europe?
While not officially approved for distribution in Europe, some brokers provide access to U.S. exchanges where these ETFs trade. However, for European investors, these products often have tax disadvantages compared to ETNs. Gains from U.S. ETFs are typically subject to capital gains tax immediately, whereas some European ETNs may benefit from a tax exemption after a one-year holding period.
Are Bitcoin ETNs safe?
ETNs carry counterparty risk because they are debt obligations of the issuing institution. If the issuer goes bankrupt, the value of the ETN could be affected. Physically backed ETNs that hold real Bitcoin may mitigate this risk somewhat, but it remains a key consideration compared to directly holding the asset.
What is the cheapest Bitcoin ETN?
Based on the Total Expense Ratio (TER), among the larger ETNs, the WisdomTree Physical Bitcoin (TER: 0.15%) and the 21Shares Bitcoin Core ETP (TER: 0.21%) are some of the lowest-cost options available.
How do I start investing in a Bitcoin ETN?
To invest in a Bitcoin ETN, you need a brokerage account (Depot) with a bank or online broker. Many modern brokers offer accounts with no custody fees. Once your account is funded, you can search for the ETN by its name or ISIN and place a trade, just like you would with a stock.
Is it better to invest in a Bitcoin ETN or directly in Bitcoin?
Direct ownership of Bitcoin gives you full control over your assets but comes with security responsibilities (managing private keys). An ETN offers convenience, regulation, and easy integration with a traditional investment portfolio but introduces fees and counterparty risk. The best choice depends on your technical comfort level and investment priorities.