These crypto ETFs simplify access to blockchain investments.
Exchange-traded funds are one of the easiest ways for investors to gain diversified exposure to a particular theme or asset class. One of the challenges of investing in Bitcoin and other cryptocurrencies in the early years of crypto was figuring out exactly how and where to buy them. Cryptocurrency ETFs make it just as easy to invest in Bitcoin as it is to buy popular stocks. There are now several cryptocurrency-themed ETFs out there, and that number continues to grow. Keep in mind, however, that these ETFs charge high management fees. Here are eight of the best cryptocurrency ETFs that have exposure to cryptocurrency, crypto futures contracts or companies that have significant blockchain exposure.
ProShares Bitcoin Strategy ETF (ticker: BITO)
The ProShares Bitcoin Strategy ETF was a game changer for cryptocurrency investors. The BITO ETF made history in October when it became the first cryptocurrency ETF that the Securities and Exchange Commission allowed to trade on a major U.S. exchange. Cautious Bitcoin investors who were waiting for the green light from U.S. regulators finally got their wish with the BITO fund. Instead of buying Bitcoin itself, the BITO fund holds different Bitcoin futures contracts. The BITO ETF has $1.4 billion in assets under management and a 0.95% annual expense ratio, or $95 for every $10,000 invested.
Valkyrie Bitcoin Strategy ETF (BTF)
Just days after the BITO fund began trading on the New York Stock Exchange, the Valkyrie Bitcoin Strategy ETF launched on the Nasdaq. Like the BITO fund, BTF does not invest in Bitcoin directly. Instead, it holds front-month Chicago Mercantile Exchange Bitcoin futures. Valkyrie already offers trusts for other popular cryptocurrencies on international markets, and it hopes to roll out additional U.S.-listed crypto ETFs in coming months. The BTF ETF is smaller and less liquid than BITO. The fund holds $59.5 million in assets and has a 0.95% expense ratio.
Grayscale Bitcoin Trust (GBTC)
Prior to the launch of the BITO ETF, the Grayscale Bitcoin Trust was the best Bitcoin fund option for most investors. The GBTC fund is actually a trust rather than an ETF, but Grayscale is in the process of converting it to an ETF — presumably so it can transition from over-the-counter trading to a listing on a major U.S. exchange. Unlike other Bitcoin ETFs, GBTC holds actual cryptocurrency, and each share represents about 0.0009 Bitcoin. The GBTC trust has $41.3 billion in assets and a 2% expense ratio.
Amplify Transformational Data Sharing ETF (BLOK)
The Amplify Transformational Data Sharing ETF is a popular fund that invests in businesses with exposure to blockchain technology, the unique backbone of the cryptocurrency market. Top holdings include Silvergate Capital Corp. (SI), Galaxy Digital Holdings Ltd. (GLXY) and Coinbase Global Inc. (COIN). The BLOK ETF provides significant diversity within the blockchain space. It has 45 total holdings, and its top 10 holdings account for about 44% of its $1.7 billion in assets. The BLOK fund does not hold cryptocurrencies directly, but several of its holdings do, including Galaxy Digital and Square Inc. (SQ). The fund has a 0.71% expense ratio.
Bitwise 10 Crypto Index Fund (BITW)
Most of the biggest crypto funds are focused on Bitcoin, but the Bitwise 10 Crypto Index Fund provides investors with exposure to the 10 most valuable cryptocurrencies by market capitalization. Bitwise says it screens the fund’s holdings for certain risks, weights it by market cap and rebalances it monthly. In addition to Bitcoin and Ethereum, holdings include altcoins such as Algorand and Uniswap. The BITW fund is closed-ended and trades over the counter in the U.S. It has $1.4 billion in assets and a 2.5% expense ratio.
Grayscale Ethereum Trust (ETHE)
Bitcoin and Ethereum are by far the two largest and most popular cryptocurrencies, so investors looking to focus specifically on those two cryptos can get their Ethereum fix from the Grayscale Ethereum Trust. If the conversion of GBTC to an ETF goes smoothly, Grayscale will likely transition the ETHE trust to an ETF in the near future and potentially list on a major exchange as well. The ETHE trust has $14.5 billion in assets and a 2.5% expense ratio. Each ETHE share represents about 0.01 ether, the native token on the Ethereum platform.
Siren Nasdaq NexGen Economy ETF (BLCN)
The Siren Nasdaq NexGen Economy ETF is another blockchain-focused ETF that tracks the Nasdaq Blockchain Economy Index. Like the BLOK ETF, the BLCN fund doesn’t invest directly in cryptocurrency, but several of its holdings have crypto on their balance sheets. Blockchain-focused stock prices have a high correlation to cryptocurrency prices. BLCN’s top holdings include Bakkt Holdings Inc. (BKKT), Silvergate Capital and Overstock.com Inc. (OSTK). The BLCN ETF has fewer assets than the BLOK fund at just $314 million and charges a 0.68% expense ratio.
First Trust Indxx Innovative Transaction & Process ETF (LEGR)
The First Trust Indxx Innovative Transaction & Process ETF is another popular blockchain ETF that has a unique selection and weighting process. Half of the fund’s weighting is devoted to companies actively developing blockchain technologies and the other half is devoted to companies using blockchain technology. This unique approach gives the fund a different composition and balance than other crypto ETFs. The $142 million fund has 101 holdings, including top holdings Nvidia Corp. (NVDA), Advanced Micro Devices Inc. (AMD) and Salesforce.com Inc. (CRM). The LEGR fund has a 1.28% dividend yield and a 0.65% expense ratio.
Best cryptocurrency ETFs to buy:
— ProShares Bitcoin Strategy ETF (BITO)
— Valkyrie Bitcoin Strategy ETF (BTF)
— Grayscale Bitcoin Trust (GBTC)
— Amplify Transformational Data Sharing ETF (BLOK)
— Bitwise 10 Crypto Index Fund (BITW)
— Grayscale Ethereum Trust (ETHE)
— Siren Nasdaq NexGen Economy ETF (BLCN)
— First Trust Indxx Innovative Transaction & Process ETF (LEGR)
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8 Best Cryptocurrency ETFs to Buy originally appeared on usnews.com
