This has been a banner year for cryptocurrency, particularly Bitcoin, which has surged 151% year to date as of Dec. 16. The momentum began in January, with the launch of spot Bitcoin exchange-traded funds (ETFs) and has only gained steam from there.
Now, the cryptocurrency market looks set to close out the year on a high note, largely thanks to political developments. Much of this excitement stems from President-elect Donald Trump, whose son Eric declared at a recent conference that his father would be the “most crypto president in history,” according to the New York Times.
“The incoming Trump administration’s continued warming towards crypto has created a seismic shift forward for the industry,” says Chris Kline, chief operating officer and co-founder of Bitcoin IRA.
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A significant driver of this optimism is the anticipation of a pro-crypto regulatory environment. Trump is widely expected to appoint crypto-friendly personnel to the Securities and Exchange Commission (SEC), which has historically clashed with the cryptocurrency industry under outgoing chair Gary Gensler.
“Strategic appointments of crypto-forward advocates, including Paul Atkins to lead the Securities and Exchange Commission and David Sacks as the inaugural artificial intelligence and crypto czar, underscore a deliberate recalibration of the fintech landscape,” Kline notes.
Another game-changing development is Trump’s promise to establish a “strategic Bitcoin reserve.” If implemented, potentially via executive order (a favorite tool of Trump’s first tenure), Bitcoin could potentially rival gold as a reserve asset.
This idea also finds support in the Boosting Innovation, Technology and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act of 2024, introduced by Wyoming Sen. Cynthia Lummis. The legislation calls for the purchase of 1 million Bitcoin over five years.
“These calculated maneuvers suggest a comprehensive reengineering of American technology policy, one that could potentially elevate cryptocurrency from a speculative asset to mainstream economic instruments,” Kline argues.
If you believe these promises will materialize, a cryptocurrency ETF can help you position yourself for the potential “supercycle” ahead.
By using an ETF, you gain exposure to Bitcoin and other cryptocurrencies like Ethereum without the complexities of self-custody. ETFs trade just like stocks, can be held in existing brokerage accounts and are even eligible for some tax-sheltered accounts like a Roth IRA or a health savings account.
“Looking back at 2016, there was only one option to directly hold Bitcoin within your retirement account,” Kline says. “Now, there are routes to hold crypto assets in nearly every type of financial account, and the market is better for it.”
Here are seven of the best cryptocurrency ETFs to buy today:
| ETF | Expense ratio |
| Cyber Hornet S&P 500 and Bitcoin 75/25 Strategy ETF (ticker: ZZZ) | 1.01% |
| iShares Bitcoin Trust ETF (IBIT) | 0.25%* |
| Grayscale Bitcoin Mini Trust ETF (BTC) | 0.15% |
| iShares Ethereum Trust ETF (ETHA) | 0.25%* |
| Grayscale Ethereum Mini Trust ETF (ETH) | 0.15%** |
| Roundhill Bitcoin Covered Call Strategy ETF (YBTC) | 0.95% |
| Global X Blockchain ETF (BKCH) | 0.50% |
*The expense ratio is waived down to 0.12% for the first $5 billion in assets for IBIT until January, and for the first $2.5 billion in assets for ETHA until July.
**The expense ratio is waived down to 0% for the first $2 billion of ETH’s assets until January.
Cyber Hornet S&P 500 and Bitcoin 75/25 Strategy ETF (ZZZ)
“With Bitcoin’s price breaking $100,000 and a new pro-crypto administration coming into office in January, we believe the demand will remain robust in 2025,” says Mike Willis, president and co-founder of Onefund and lead portfolio manager for ZZZ. “We believe ZZZ is an easier first step for investors and financial advisors who want exposure to Bitcoin without going all-in on Bitcoin ETFs.”
This unique cryptocurrency ETF employs a multi-asset allocation strategy. Seventy-five percent of the ETF tracks the S&P 500 to provide broad U.S. equity exposure, while 25% targets Bitcoin futures. Out of the 1,000-plus “large blend” funds tracked by Morningstar, ZZZ is currently up 45% year to date and ranks in the top 2%. However, investors should note that this ETF charges a relatively high 1.01% expense ratio.
iShares Bitcoin Trust ETF (IBIT)
“More options are good for investors, and the spot Bitcoin ETFs are a welcome addition to the market,” Kline says. “The massive inflow numbers these investments have shown this year reinforce that their convenience is helping drive wide-scale adoption.” At the top of the list is IBIT, which as of Dec. 16 has gained $6.7 billion in net inflows over the past month alone, according to data from ETF Central.
IBIT has over $57 billion in assets under management (AUM), competing comfortably with SPDR Gold Shares (GLD), which took more than 20 years to reach $73 billion in AUM. This ETF tracks the CME CF Bitcoin Reference Rate — New York Variant for a 0.25% expense ratio. In addition, IBIT was one of the first spot Bitcoin ETFs approved by the SEC for options trading.
Grayscale Bitcoin Mini Trust ETF (BTC)
IBIT charges a 0.25% expense ratio, a portion of which is being waived down to 0.12% until January. While affordable, it isn’t the cheapest spot Bitcoin ETF on the market. A much more affordable option is BTC, which charges a 0.15% sponsor fee. This ETF was created as a spin-off via 10% of the assets from Grayscale Bitcoin Trust ETF (GBTC), which charged a much higher 1.5% expense ratio.
BTC currently manages just over $4 billion in AUM, corresponding to roughly 40,138 Bitcoin in trust as of Dec. 16. Aside from small amounts moved to a “hot wallet” to facilitate creation and redemption of shares, the majority of this ETF’s Bitcoin reserves are held in “cold wallets” with Coinbase Custody Trust Co. However, liquidity isn’t as good as IBIT due to a higher 0.09% 30-day median bid-ask spread.
iShares Ethereum Trust ETF (ETHA)
Spot Ethereum ETFs debuted in late July, and, unsurprisingly, one of the winners in this niche was ETHA. Backed by iShares’ brand recognition, ETHA has grown to about $4 billion in AUM. It’s nowhere close to the size of IBIT, but for ETFs, this is still an impressive growth pace. The ETF currently tracks the CME CF Ether-Dollar Reference Rate — New York Variant index as its benchmark.
As with IBIT, ETHA charges a 0.25% base expense ratio. The ETF also has a fee waiver in place. For the first $2.5 billion in AUM, ETHA is waiving expense ratios down to 0.12%. This waiver will remain in place for 12 months starting from July 23. Unlike IBIT, ETHA does not have options available yet. However, it remains fairly liquid for regular trading, with a low 0.04% 30-day median bid-ask spread.
[SEE: 8 Ways to Diversify Your Crypto Portfolio and Limit Risk]
Grayscale Ethereum Mini Trust ETF (ETH)
BTC also has a counterpart in ETH. This Grayscale Ethereum ETF undercuts ETHA’s base fee with a 0.15% expense ratio. As with BTC, ETH was also created as a spin-off. In this case, Grayscale again took 10% of the assets from the larger Grayscale Ethereum Trust ETF, which charged a hefty 2.5% expense ratio. The ETF currently has over $1.9 billion in AUM, a level safe from fund closure risk.
To incentivize ETH inflows, Grayscale has implemented an attractive fee waiver for ETH. For a six-month period that started July 23, Grayscale is waiving ETH’s expense ratio to 0% on the first $2 billion in AUM. Given that ETH’s AUM is currently less than that, the ETF is effectively free. However, it is slightly less liquid than ETHA, with a higher 0.08% 30-day median bid-ask spread.
Roundhill Bitcoin Covered Call Strategy ETF (YBTC)
“YBTC offers the potential for high income, as it generates monthly income through a covered call strategy on Bitcoin,” says Dave Mazza, CEO of Roundhill Investments. “This ETF provides upside exposure to Bitcoin subject to a cap, offering a unique blend of income generation and Bitcoin exposure without the complexities of direct Bitcoin investment or the hassle of trading options directly.”
YBTC uses IBIT and its options chain to sell covered calls. Options premiums are particularly influenced by the reference assets volatility. Because IBIT is so volatile, covered calls sold produce higher-than-average income. This translates into an incredible 40.8% distribution rate. However, investors should note that this yield can fluctuate and the upside price return of YBTC is capped. YBTC also plans to switch its payout schedule from monthly to weekly in January.
Global X Blockchain ETF (BKCH)
“As observed in 2023, blockchain and crypto-related stocks, such as miners and crypto exchanges, typically offer higher beta trades ahead of major events,” says Ido Caspi, research analyst at Global X ETFs. “The influx of institutional capital into Bitcoin is expected to significantly increase Bitcoin activity and, consequently, transaction fees.” To focus more on the crypto industry, investors can buy BKCH.
Unlike the previous ETFs, BKCH does not hold spot Bitcoin or Bitcoin futures. Instead, it holds a portfolio of 25 stocks represented by the Solactive Blockchain Index. Notable holdings include cryptocurrency exchange Coinbase Global Inc. (COIN), cryptocurrency miner Mara Holdings Inc. (MARA), and blockchain infrastructure and software provider Core Scientific Inc. (CORZ). The ETF charges a 0.5% expense ratio.
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7 Best Cryptocurrency ETFs to Buy originally appeared on usnews.com
Update 12/17/24: This story was previously published at an earlier date and has been updated with new information.
