Here’s How the New Bitcoin ETFs Work

Regulators have given the green light to the first U.S. exchange-traded funds that directly hold bitcoin. Crypto enthusiasts hope the new funds—backed by asset managers such as BlackRock and Fidelity Investments—will draw more mainstream investors into bitcoin.

In many ways, the new ETFs are similar to the gold ETFs that emerged in the early 2000s and became a popular way to invest in the precious metal. Instead of buying physical bars of gold, investors could buy shares in a gold fund through their brokerage, just like buying stocks.