BITCOIN ETFs will allow investors to trade in crypto without having to buy any.

       Exchange-traded funds (EFTs) in Bitcoin are expected to be approved by the US Securities and Exchange Commission (SEC) as early as next week.

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       Bitcoin EFTs are a way to invest in the crypto without having to buy any Credit: Reuters What is a Bitcoin ETF?

       An ETF is an investment fund which tracks the price of an asset - in this case, Bitcoin - on an open market exchange like the NYSE or LSE.

       Investors don't need to buy the crypto or faff about buying a wallet - they just need to find an EFT fund that invests in it.

       Of course, there are downsides, such as management fees, which is paid to the investment firm.

       And because EFTs aren't just made up of Bitcoin, they can also be inaccurate.

       This also means traders won't be able to exchange the EFT for other cryptos like Ethereum, Litecoin.

       How do Bitcoin ETFs work?

       EFTs typically consist of several different stocks to lower the risk of trading.

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       Because one EFT can have random stock, the investors won't lose big if one of the stocks crash. The others should minimise the impact of that one bad trade.

       All Bitcoin EFTs would do is mimic the crypto's price without having to physically buy any.

       Because ETF holders won't be directly invested in Bitcoin itself, they won't need to worry about the complex storage and security procedures.

       EFTs can also be tax efficient.

       Because Bitcoin is unregulated and decentralised, the majority of the world's tax havens and pension funds won't purchase it.

       But, Bitcoin EFTs are traded on traditional exchanges, which are regulated by the SEC, making them eligible for tax efficiency.

       Are ETFs the reason Bitcoin's price is rising?

       Bitcoin has broken above $60,000 for the first time since April.

       The latest gains come as the US SEC signalled it was set to approve the first Bitcoin futures early next week, according to the Independent.

       Other cryptos have also shot up in price, including Ethereum, Binance Coin and Ripple - which all rose by 5 and 10 per cent over the last week, the outlet reports.

       Some analysts have forecast a record-breaking end to the year, with one price prediction model putting Bitcoin on track to hit a new all-time-high by November.

       The same model predicts that Bitcoin will hit six figures in 2021.