These Bitcoin and crypto ETFs are among the best.
Exchange-traded funds, or ETFs, 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 invest in 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.
Grayscale Bitcoin Trust (ticker: GBTC)
The Grayscale Bitcoin Trust launched way back in 2013 and was the first Bitcoin fund option for many crypto investors. The GBTC fund is actually a trust rather than an ETF. In June, the U.S. Securities and Exchange Commission rejected Grayscale’s application to convert the GBTC fund to a spot Bitcoin ETF, and Grayscale responded by suing the SEC. Unlike other Bitcoin ETFs, the GBTC fund holds actual cryptocurrency, and each share represented 0.00091297 Bitcoin as of Dec. 29. Unfortunately, GBTC currently trades at about a 47% discount to its net asset value, nearly its largest discount in history. The GBTC trust has $10.5 billion in assets under management, or AUM, as of Dec. 29 and an average trading volume of about 5 million shares. It costs an expense ratio of 2.0%, or $200 per year for every $10,000 invested.
ProShares Bitcoin Strategy ETF (BITO)
The ProShares Bitcoin Strategy ETF was a game-changer for cryptocurrency investors. The BITO ETF made history in October 2021 when it became the first cryptocurrency ETF that the SEC allowed to trade on a major U.S. exchange after rejecting previous proposals over concerns for investor safety. 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 $551 million in AUM and a daily trading volume of 7.9 million shares. It costs an expense ratio of 0.95%.
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 86% 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 $45.9 million in AUM and average daily volume of 1,083 shares. It costs an expense ratio of 0.73%.
Bitwise Crypto Industry Innovators ETF (BITQ)
The Bitwise Crypto Industry Innovators ETF launched in May 2021 and offers a way for investors to gain diversified exposure to the cryptocurrency industry without the complications of investing in cryptocurrency directly. The BITQ fund is a traditional ETF that invests 85% of its assets in pure-play crypto companies and the remainder in diversified businesses with exposure to crypto. The BITQ fund currently owns 27 stocks. Top holdings include cryptocurrency financial services firm Galaxy Digital Holdings Ltd. (BRPHF), business intelligence specialist and Bitcoin investor MicroStrategy Inc. (MSTR) and cryptocurrency exchange Coinbase Global Inc. (COIN). The BITQ fund has $33.2 million in AUM and an average trading volume of around 140,000 shares. It costs an expense ratio of 0.85%.
Valkyrie Bitcoin Strategy ETF (BTF)
Just days after the BITO fund began trading on the New York Stock Exchange in October 2021, the Valkyrie Bitcoin Strategy ETF launched on the Nasdaq. Like the BITO fund, the BTF fund does not invest in Bitcoin directly. Instead, it holds front-month Chicago Mercantile Exchange, or CME, Bitcoin futures. Valkyrie is an alternative asset manager that specializes in digital assets, and the firm also manages trusts for popular cryptocurrencies Bitcoin, Polkadot, Tron and Zilliqa. The BTF ETF is smaller and less liquid than the BITO ETF. The fund’s AUM is $19.5 million, and its daily trading volume is around 270,000 shares. It costs an expense ratio of 0.95%.
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, or RIC, giving the fund certain tax advantages. C-corps are not required to distribute long-term capital gains. The fund’s AUM is $20.9 million, and its daily trading volume is around 28,500 shares.
Global X Blockchain & Bitcoin Strategy ETF (BITS)
The Blockchain & Bitcoin Strategy ETF is Global X’s second blockchain-related ETF and was 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 roughly 50% of its holdings to CME Bitcoin futures contracts and 50% to the Global X Blockchain ETF (BKCH). The BITS fund has $6.6 million in AUM and an average daily trading volume of about 2,600 shares.
7 best cryptocurrency ETFs to buy now:
— Grayscale Bitcoin Trust (GBTC)
— ProShares Bitcoin Strategy ETF (BITO)
— Simplify US Equity PLUS GBTC ETF (SPBC)
— Bitwise Crypto Industry Innovators ETF (BITQ)
— Valkyrie Bitcoin Strategy ETF (BTF)
— VanEck Bitcoin Strategy ETF (XBTF)
— Global X Blockchain & Bitcoin Strategy ETF (BITS)
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Update 12/30/22: This story was previously published at an earlier date and has been updated with new information.