5 Best Cryptocurrency ETFs to Buy
Introduction to Bitcoin and cryptocurrencies
Bitcoin and cryptocurrencies have gained traction in recent years. What started with Bitcoin has grown to become a $3 trillion industry, with thousands of cryptocurrencies now available to investors all over the world.
Cryptocurrencies have become investment assets available to both retail and institutional investors. The entry of institutional investors into the cryptocurrency space has created the need to launch crypto-focused funds, allowing them to gain direct and indirect exposure to BTC and other cryptocurrencies.
What are ETFs?
An exchange-traded fund (ETF) is a security designed to track a cryptocurrency, an index, sector, commodity or other types of assets. Unlike the regular cryptocurrencies that are traded on crypto exchanges, the crypto ETFs are bought and sold on stock exchanges like regular stocks. An ETF can be designed to track the performance of anything ranging from an individual stock, commodity or asset to a large and diverse collection of securities.
An exchange-traded fund (ETF) is a type of security that tracks an index, sector, commodity, or other assets, but which can be purchased or sold on a stock exchange the same way a regular stock can. An ETF can be structured to track anything from the price of an individual commodity to a large and diverse collection of securities. ETFs can even be structured to track specific investment strategies.
Top five crypto ETFs to buy now
There are numerous ETFs that track the performance of cryptocurrencies. Here are the top five ETFs that give you exposure to cryptocurrencies.
ProShares Bitcoin Strategy ETF (BITO)
This is the first cryptocurrency-focused ETF approved in the United States, and it generated a lot of buzzes. The ProShares Bitcoin Strategy ETF tracks the performance of Bitcoin futures contracts. The funds hold different Bitcoin futures contracts and have grown to have more than $1.4 billion in assets under management barely a month after it was approved by the US SEC. The BITO ETF has a 0.95% annual expense ratio or $95 for every $10,000 invested. Thus, making it one of the best Bitcoin futures ETFs currently available to investors. As Bitcoin’s adoption continues to increase, BITO’s value would increase as more institutional investors seek to gain exposure to BTC.
Valkyrie Bitcoin Strategy ETF (BTF)
The Valkyrie Bitcoin Strategy ETF (BTF) is also a Bitcoin futures ETF that was launched a few days after BITO was approved by the SEC. BTF trades on the NASDAQ stock exchange and, similar to BITO, doesn’t invest directly in Bitcoin. Rather, BTF holds front-month Chicago Mercantile Exchange Bitcoin futures. BTF has nearly $60 million in assets under management with a 0.95% expense ratio. This ETF is set to become even more popular amongst investors as Valkyrie plans to launch more crypto-focused funds over the coming months and years.
VanEck Bitcoin Strategy ETF (XBTF)
The VanEck Bitcoin Strategy ETF gained the SEC’s approval in October but was launched on the CBOE exchange today. It is the third Bitcoin futures ETF available in the United States and is expected to gain adoption due to VanEck’s reputation as one of the leading investment firms in the country. XBTF debuted today on the NASDAQ stock exchange and is trading around the $60 per share mark. It could surge higher over the coming weeks and months as the demand increases.
Purpose Bitcoin ETF (BTCC)
While the US is yet to approve a single spot Bitcoin ETF, its North American neighbor Canada has already approved a few. The Purpose Bitcoin ETF (BTCC) is one of the largest spot Bitcoin ETFs in the world, with more than $1 billion in assets under management. BTCC’s price could rally higher over the coming years as more investors seek ETFs that have direct exposure to Bitcoin, especially as the United States continues to reject the launch of similar funds.
Amplify Transformational Data Sharing ETF (BLOK)
Amplify Transformational Data Sharing ETF (BLOK) is a fund that invests roughly 80% of its total assets in stocks engaged in the development of blockchain technologies. BLOK doesn’t track an index but rather focuses on various value and growth stocks within the cryptocurrency space. Some of BLOK’s top holdings include MicroStrategy, PayPal, Coinbase and Square. This fund has an expense ratio of 0.71%, a one-year return of 195%, and currently has more than $1 billion in assets under management. BLOK’s value could increase from its current $59 per share as the underlying stocks continue to perform due to the cryptocurrency market growing bigger over the coming months and years.