Bitcoin and Ethereum ETFs: taxation of indirect investment in crypto
In January 2024, the US SEC approved the first Bitcoin spot ETFs. Europe already had crypto ETPs (Exchange Traded Products) years before. For Spanish investors, these vehicles offer a way to gain exposure to crypto with different (and sometimes more favorable) taxation than direct holding.
What is a Bitcoin ETP/ETF?
- Bitcoin Spot ETF (USA): A fund that buys and custody real Bitcoin. The fund's shares are listed on stock exchanges (NYSE, Nasdaq). IBIT (BlackRock), FBTC (Fidelity), BITB (Bitwise) are the main ones.
- European Bitcoin ETP: Certificate or ETP that follows the price of BTC. BTCE (21Shares), XBTC (WisdomTree), ABTC (21Shares) on Euronext Amsterdam, Deutsche Borse, etc.
- Ethereum ETF (USA): Approved in May 2024. ETHA (BlackRock), FETH (Fidelity).
Taxation of crypto ETFs/ETPs in Spain: the big difference
This is the main advantage: Bitcoin/Ethereum ETFs/ETPs, being financial products listed on regulated markets, are treated as shares/stock securities in personal income tax, NOT as cryptocurrencies.
Implications:
- Equity gains based on savings: Same as cryptocurrencies. Same type (19-28%).
- Automatic withholding: If you have the ETF through a regulated Spanish broker (DEGIRO, Interactive Brokers, etc.), the capital gain may be subject to automatic withholding of 19% (depending on the custodian).
- No obligation to Form 721: The listed ETFs are transferable securities, not cryptoassets → without obligation to declare on Form 721 (they would be declared on Form 720 if the custodian is foreign and the value exceeds €50,000).
- Transfers between funds: Listed ETFs are not governed by the exemption of transfers between funds (this applies only to unlisted investment funds).
Form 720: do I have to declare my BTC ETFs in the US?
If you have IBIT shares (BlackRock Bitcoin ETF) in an American broker (Schwab, Fidelity, etc.) with a value > €50,000:
- Yes, you must use Form 720 (foreign securities), not 721.
- They are shares of a fund, not direct cryptocurrencies.
Crypto ETF Dividends: Do They Exist?
Most Bitcoin/Ethereum ETFs do not distribute dividends. They are accumulation. However, some synthetic or income ETPs may distribute returns. In that case, the dividends are taxed as capital with withholding at source.
Comparison: ETF vs. Bitcoin direct
| Feature | Bitcoin direct | Bitcoin ETF (ES broker) |
|---|---|---|
| Self-custody | Yes | No |
| Tax cost (profit) | 19-28% savings base | 19-28% savings base |
| Automatic hold | No | Yes (regulated broker) |
| Model 721 | Yes (if it were an exchange) | No (it is ETP/security) |
| Model 720 | No (721 covers crypto) | Yes (if foreign broker) |
| Management committee | No | Yes (0.12-1% annually) |
| Transferability | Global, 24/7 | Stock hours |
Tax advantages of ETF vs. direct crypto
- Automatic retention: The broker calculates and retains, reducing the risk of error.
- Clear tax information: The broker issues the annual tax certificate.
- Without Form 721: If the custodian is Spanish, there is no additional obligation to provide information.
- Possible losses compensable with gains from other securities (same savings base).
Crypto investment funds: those registered with the CNMV
Some investment funds registered in Spain invest in crypto (crypto assets, companies in the sector). If they are conventional investment funds (not ETFs):
- They benefit from the transfer regime: You can transfer them to another fund without paying taxes until rescued.
- Redemption taxation: capital gains based on savings.
This is an important advantage over direct BTC/ETH where each sale is a taxable event.
Is it worth investing in ETFs instead of direct crypto?
It depends on your profile. The ETF is simpler fiscally, but you lose sovereignty and pay management fees. For a long-term investor who doesn't do DeFi or self-custody, the ETF may be fiscally easier.
Updated: April 2026 | Fiscal year: 2025