Recently, I was reviewing the difference between ETFs and ETPs, and honestly, a lot of people confuse them. Let me explain this clearly, because it’s important to understand it if you want to invest in crypto.

Let’s start with ETFs. Basically, they are funds that trade on the stock exchange—like a basket of assets that you can buy and sell just like a stock. The most famous example is SPY, which tracks the S&P 500 and is the largest fund in the world. The idea is simple: instead of buying 500 individual stocks, you buy a certificate that represents your share in that fund.

Now, a Bitcoin ETF works exactly the same way. When you invest in it, you don’t own Bitcoin directly—you own a fund that mirrors it. The profit is the same because the ETF price follows Bitcoin. When Bitcoin goes up, your ETF goes up with it. The advantage is that you don’t have to deal with issues like where to store the coins or worry about hacks.

But here’s the interesting part: ETPs are different, even though they’re similar. The meaning of ETP is Exchange Traded Products—products traded on a platform. The key difference is that ETPs are structured debt instruments, not funds like ETFs. This sounds technical, but what matters is that they are tied to the value of underlying assets, whether those are commodities, cryptocurrencies, or indices.

A real example: in November 2018, the Swiss stock exchange launched the Amun ETP, the first global multi-cryptocurrency product. It tracked an index of the five largest coins by market capitalization: BTC (49.7%), XRP (25.4%), ETH (16.7%), LTC (3%), and BCH (5.2%). This allowed institutional investors to access crypto without complicated regulatory requirements.

Now, why does the legal meaning of ETP matter? Swiss regulators were clear: ETPs are not subject to the same investment fund laws as ETFs. That gives them more flexibility. In fact, that’s why Grayscale was able to launch its Bitcoin Investment Trust in the United States as an ETP, while the SEC repeatedly rejected Bitcoin ETFs because they required the crypto futures market to be more stable.

In summary, both products democratize access to Bitcoin and crypto for institutional investors. ETFs are more regulated but also more restrictive. ETPs have fewer barriers, but they’re classified as bonds. The choice depends on where you invest and what regulation applies. What’s important is that you no longer need to be an expert in wallets and security to get exposure to crypto.