Answer: allow investors to trade shares in trusts holding large pools of a cryptocurrency.

## Explanation Cryptocurrency exchange-traded funds (ETFs) are investment vehicles that allow investors to gain exposure to cryptocurrencies without directly owning them. Let's analyze each option: **Option A: "do not typically invest directly in cryptocurrencies."** - This is incorrect. Many cryptocurrency ETFs do invest directly in cryptocurrencies. They hold the underlying cryptocurrency assets in custody, allowing investors to gain exposure through traditional brokerage accounts. **Option B: "allow investors to trade shares in trusts holding large pools of a cryptocurrency."** - This is **CORRECT**. Cryptocurrency ETFs typically work by creating a trust that holds large pools of a specific cryptocurrency (like Bitcoin or Ethereum). Investors can then buy and sell shares of this trust on traditional stock exchanges, just like they would with any other ETF. **Option C: "represent agreements to buy or sell a specific quantity of cryptocurrency at a specified price and date."** - This describes cryptocurrency futures or options contracts, not ETFs. ETFs are investment funds that hold assets, not derivative contracts. ### Key Points: 1. **Structure**: Cryptocurrency ETFs are structured as trusts that hold the underlying cryptocurrency. 2. **Trading**: Shares of these trusts trade on traditional stock exchanges. 3. **Accessibility**: They provide easier access to cryptocurrency exposure for traditional investors. 4. **Regulation**: They are regulated financial products, unlike direct cryptocurrency trading on exchanges. **Correct Answer: B**

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