Spot ETF

Definition ∞ A spot ETF, or Exchange Traded Fund, directly holds the underlying asset it tracks, rather than derivatives or futures contracts. For digital assets, a spot ETF means the fund physically possesses the cryptocurrency, offering investors direct price exposure without requiring them to own the asset themselves. This structure aims to provide a regulated and accessible investment vehicle for a specific digital asset. It simplifies access for traditional market participants.
Context ∞ The approval and performance of spot Bitcoin ETFs have been a dominant news item in the cryptocurrency market, signaling a significant step towards mainstream institutional adoption. These products allow traditional investors to gain exposure to Bitcoin through conventional brokerage accounts, removing the complexities of direct cryptocurrency ownership. The ongoing discussion now shifts to the potential approval of spot ETFs for other major digital assets. This development is closely watched for its influence on market liquidity and price discovery.