Crypto index funds and ETFs allow investors to earn passive income by providing diversified exposure to digital assets without the need for active management. They can track a group of cryptocurrencies or mirror the price of specific assets and are available in both centralized and decentralized formats. Income can come from various sources, such as asset appreciation, staking, DeFi yields, and covered call strategies. Popular 2025 options include Bitwise 10, TokenSets, and Nasdaq Crypto Index for indexing, and notable ETFs like ProShares Bitcoin Strategy ETF and Purpose Bitcoin Yield ETF for exposure through traditional brokerage accounts. While these investments can yield returns and offer diversification, they also come with risks, including market volatility, smart contract vulnerabilities, and management fees. Taxation rules vary by jurisdiction, making it essential to understand the implications of passive income and seek professional advice. Overall, crypto ETFs and index funds present an appealing route for investors looking for long-term gains without daily trading stress.

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