TDCI’s Securities Team Reminds Consumers to Learn More About Crypto ETFs Before Investing

Tuesday, August 12, 2025 | 08:34am

NASHVILLE – As crypto-related investment products become increasingly available to investors of all financial backgrounds, the Tennessee Department of Commerce & Insurance’s (TDCI) Securities Division is reminding consumers to learn more about all crypto products – including Crypto Exchange-Traded Funds (ETFs) – before making an investment.  

A crypto ETF is a regulated investment vehicle that allows investors to gain exposure to crypto’s price movements without directly owning or managing crypto assets. These funds, whose value is based on an underlying crypto asset like Bitcoin or Ethereum, are traded on traditional stock exchanges, making them accessible through standard brokerage accounts.  

There are two kinds of crypto ETFs: spot crypto ETFs and crypto futures ETFs Understanding the key differences between the two types is important for prospective investors. Remember:  

  • A spot crypto ETF is designed to track the price of a specific crypto asset by holding the actual asset in reserve.  
  • Spot crypto ETFs track the cryptocurrency’s real-time price by holding the crypto asset in secure digital wallets managed by custodians.  
  • Each share of a spot crypto ETF corresponds to a specific fraction of the crypto assets held in reserve. 

“While crypto ETFs may be regulated, consumers should remember that all investments come with an inherent risk,” said Assistant Commissioner for the Securities Division Elizabeth Bowling. “Before investing in crypto ETFs or any financial vehicle, consumers should conduct their own research, get a good understanding about how these investments work, and determine their risk tolerance. Investors who have questions about investments should remember they can contact my Securities team today.”  

Visit our latest blog post for more information about crypto ETFs.  

Investing in crypto ETFs? Remember these important tips:  

  • Conduct due diligence. Ensure you understand crypto ETFs before investing in them. Review the prospectus and consult with an investment professional whom you have verified is registered with your state or provincial securities regulator. 
  • Know your risk tolerance. Crypto ETFs are tied to the price of crypto assets, which can be volatile. Consider your risk tolerance and investment objectives before making any investment decisions. 
  • Even though the crypto ETF may be a regulated product, that does not mean it is without risk. 

TDCI’s Securities team is available to answer questions. Contact us by phone at (800) 863-9117 or (615) 741-2947, by email at securities.1@tn.gov or visit us online. 

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