These Bitcoin and crypto ETFs are among the best.
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 (BTC) and other cryptocurrencies in the early years of crypto was figuring out exactly where and how to buy them. However, cryptocurrency ETFs now make it just as easy to buy Bitcoin as it is to buy popular stocks. There are a handful of cryptocurrency-themed ETFs out there, and that number continues to grow. Here are seven of the best cryptocurrency ETFs that have exposure to Bitcoin or other cryptos.
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 U.S. 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 about $800 million in assets under management, or AUM, and a daily trading volume of 6.6 million shares.
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 Nasdaq. Like the BITO fund, the BTF fund 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 is hoping to roll out additional U.S.-listed crypto ETFs in the future. The BTF ETF is much smaller and less liquid than the BITO ETF. The fund’s AUM is $26 million, and its daily trading volume is around 254,000.
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 currently 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. The GBTC trust has $19.3 billion in AUM and an average trading volume of 4.4 million shares. Unlike other Bitcoin ETFs, the GBTC fund holds actual cryptocurrency, and each share currently represents 0.0009235 Bitcoins.
VanEck Bitcoin Strategy ETF (XBTF)
The VanEck Bitcoin Strategy ETF is VanEck’s version of a Bitcoin futures fund. The XBTF fund launched in November 2021 following the launch of the BTF and BITO funds and is differentiated in two ways. First, the XBTF fund has a significantly lower expense ratio than the other two funds, at just 0.65%. In addition, it is structured as a C-corp rather than a registered investment corporation, giving the fund certain tax advantages. C-corps are not required to distribute long-term capital gains. The fund’s AUM is $23.6 million, and its daily trading volume is around 28,500. Both numbers are on the lower side for ETFs.
Simplify US Equity PLUS GBTC ETF (SPBC)
The Simplify US Equity PLUS GBTC ETF launched in May 2021 and provides a unique way for investors to gain diversified exposure to Bitcoin and the S&P 500. The fund targets 100% exposure to U.S. equities via investing in ETFs and futures contracts. More than 83% of its allocation is to the iShares Core S&P 500 ETF (IVV), one of the most popular S&P 500 ETFs. In addition, the SPBC targets an additional 10% allocation to the GBTC fund. It has $100.5 million in AUM and average daily volume of 3,700 shares.
Valkyrie Balance Sheet Opportunities ETF (VBB)
The Valkyrie Balance Sheet Opportunities ETF doesn’t invest in Bitcoin directly. Instead, it provides indirect exposure to cryptocurrencies by investing in companies that hold Bitcoin on their balance sheets or profit from Bitcoin transactions. The VBB fund has $650.5 million in AUM and average daily trading volume of 1,200 shares. Top fund holdings include Tesla Inc. (TSLA), Microstrategy Inc. (MSTR) and Block Inc. (SQ), which together account for nearly a third of the fund’s allocation.
Blockchain & Bitcoin Strategy ETF (BITS)
The Blockchain & Bitcoin Strategy ETF is Global X’s second blockchain-related ETF, launched in November 2021. The BITS fund offers investors exposure to both Bitcoin futures contracts and companies exposed to blockchain technology. Stocks held in the BITS fund include cryptocurrency mining companies, companies involved in digital asset transactions, and companies with blockchain applications and software services. The BITS fund allocates about 50% of its holdings to CME Bitcoin futures contracts and 50% to the Global X Blockchain ETF (BKCH). The BITS fund has $9.8 million in AUM and an average daily trading volume of 11,400 shares.
7 of the best cryptocurrency ETFs to buy:
— ProShares Bitcoin Strategy ETF (BITO)
— Valkyrie Bitcoin Strategy ETF (BTF)
— Grayscale Bitcoin Trust (GBTC)
— VanEck Bitcoin Strategy ETF (XBTF)
— Simplify US Equity PLUS GBTC ETF (SPBC)
— Valkyrie Balance Sheet Opportunities ETF (VBB)
— Blockchain & Bitcoin Strategy ETF (BITS)
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Update 06/06/22: This story was published at an earlier date and has been updated with new information.