As of August 2020, the United States Securities and Exchange Commission was still not close to granting approval to an exchange-traded fund focused on the digital currency markets. ETFs would provide the global cryptocurrency market with greater legitimacy because they would be listed on major Wall Street platforms such as the New York Stock Exchange and the Nasdaq; they would also give institutional investors a chance to speculate on digital currencies without putting too much "skin in the game," which means that they would be entrusting portfolio managers to make the most of their investments without actually holding tokens.

Investors do not have to wait on the SEC to approve cryptocurrency ETFs. Private funds that focus on holding tokens have been available to U.S. investors for a few months. Moreover, ETF-like securities have been listed on foreign stock markets since 2018, and these are markets that allow American investors to participate. The three kinds of cryptocurrency funds available to U.S. investors today include:

Buy-and-Hold Funds

These are private portfolios that do not fall under the purview and oversight of the SEC. In most cases, they are invitation-only funds that prefer large initial investments worth tens of thousands of dollars. These funds mostly stick to a single strategy of acquiring tokens and holding on to them for the long-term; however, investors are able to profit on the total return of the fund.

Publicly Traded Cryptocurrency Funds

The closest we have to cryptocurrency ETFs these days are the Grayscale Bitcoin Trust and the ARK Investment Management fund. These investment banking firms have been able to get approval for their securities because they manage fractions of a larger trust that amasses and holds Bitcoin tokens. The respective symbols of these funds are GBTC and ARKW.

Cryptocurrency Hedge Funds

It took a few years for hedge fund managers to warm up to digital currencies. Once they saw that Bitcoin futures started trading on the Chicago Mercantile Exchange, hedge fund managers realized that cryptocurrency tokens were digital investment assets they could add to their portfolios. What makes these hedge funds interesting to some investors is that they tend to be very active, in some cases competing against day traders in order to increase overall value.