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Why more investors are choosing Crypto ETFs Over Coins

Crypto is everywhere. Should it be in your portfolio?

Cryptocurrency has become increasingly prominent in recent years, capturing attention across news outlets, social media, and everyday conversations. As digital assets gain mainstream traction, many investors are contemplating their place in a diversified portfolio. However, the complexities of managing digital wallets, safeguarding private keys, and navigating volatile markets can be daunting. For those interested in the potential of cryptocurrencies without the intricacies of direct ownership, crypto exchange-traded funds (ETFs) present a more accessible alternative.

Canada has been a global leader in the crypto space, notably becoming the first country to approve a spot Bitcoin ETF. In February 2021, the Ontario Securities Commission authorized the launch of the Purpose Bitcoin ETF, providing investors with direct exposure to physically settled Bitcoin through a regulated investment vehicle.

Why ETFs, Not Coins?

Accessible and Positioned for Growth
Crypto ETFs provide an easy way to invest in digital assets through platforms you already know. Some ETFs track a single cryptocurrency, while others offer diversification by including multiple cryptos or a mix of crypto and technology companies that support the blockchain ecosystem. This variety helps investors participate in crypto’s growth while managing risk.

Security
Investing indirectly through ETFs can lower some risks compared to holding cryptocurrencies directly. There’s no need to manage wallets or worry about losing private keys, which reduces exposure to fraud, hacking, and technical issues that can come with direct crypto ownership.

Regulatory Protections
Crypto ETFs are traded on regulated markets, unlike many crypto exchanges. This adds transparency, oversight, and investor protections that are becoming even more important as regulations evolve.

Tax-Advantaged Growth
One primary benefit of using crypto ETFs is the ability to hold them in registered accounts like the TFSA, FHSA, or RRSP.

  • Tax-free gains in TFSAs or FHSAs (subject to FHSA rules)
  • Tax-sheltered growth in RRSPs, with taxes deferred until withdrawal

Direct crypto holdings on exchanges do not offer these tax benefits, making ETFs a smart choice for long-term growth.

Professionally Managed and Secure
Crypto ETFs are overseen by professional fund managers. You don’t have to follow crypto trends daily or rebalance your holdings. These funds often come with built-in security and institutional-grade custody, protecting your investments from common risks like hacking or misplaced passwords.

A Few Trade-Offs to Consider

While crypto ETFs simplify access to the digital asset market, it’s important to be aware of a few trade-offs:

  • No Direct Ownership. You won’t own the actual crypto, so it can't be transferred or used in decentralized applications. However, this also means less complexity and lower risk.
  • Fees. Most ETFs charge an annual management fee (MER), which varies by fund.
  • Tracking Gaps. ETF prices might not perfectly match the real-time value of the underlying cryptocurrency.

Ready to Explore Your Options?

If you’ve considered the benefits and trade-offs, and have done your own research, the next step is finding the right ETF to match your goals. The good news is there are plenty of choices available, depending on your comfort level, investment timeline, and the type of exposure you're looking for.

Types of Crypto ETFs You Can Invest In

Investors can choose from several types of crypto ETFs, depending on their goals and risk tolerance:

  • Spot ETFs. This provides indirect ownership of shares of an actual crypto digital token in one or multiple cryptocurrencies. An investment firm managing the ETF purchased the crypto so when an investor purchases an ETF, they’ll indirectly own an amount of that cryptocurrency(ies).
  • Derivative ETFs. The investing firm does not purchase or hold any crypto; instead, this ETF tracks a derivative like futures contracts and other crypto exchange-traded products. This is a form of a synthetic variant crypto ETF which mimics the price of actual crypto, along with the rises and the falls.
  • Tech and Blockchain ETFs. These invest in companies building crypto infrastructure or developing blockchain-based technology. They are ideal for those who want to invest in the growth of the industry without owning crypto directly.

Each type provides a different way to participate in the evolving crypto economy.

The Qtrade Advantage

At Qtrade, we make it simple to add crypto ETFs to your portfolio. You can invest through your existing Qtrade account without setting up new wallets or using unfamiliar platforms. Choose from a growing selection of over 150 professionally managed crypto ETFs, including Bitcoin, Ethereum, and Solana. Enjoy secure trading, tax-efficient options, and seamless integration with your long-term investment strategy.

Explore our crypto ETF lineup today at and find the solution that fits your goals.

The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax, or similar matters.

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