5 Best Cryptocurrency ETFs to Invest in 2024
Updated July 10, 2024
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Best cryptocurrency ETF options:
- Bitwise Crypto Industry Innovators ETF (BITQ) – YTD: 147.79%
- Global X Blockchain ETF (BKCH) – YTD: 144.85%
- Siren Nasdaq NexGen Economy ETF (BLCN) – YTD: 4.82%
- Valkyrie Bitcoin Miners ETF (WGMI) – YTD: 150.34%
- Amplify Transformational Data Sharing ETF (BLOK) – YTD: 59.06%
The cryptocurrency market offers a number of options for investors looking to profit from the growth of digital assets.
One such option is investing in a crypto ETF.
Best Cryptocurrency ETFs to Consider
The following list of top crypto ETFs looks at five popular funds and their objectives.
For each you’ll find key metrics included, such as the ETFs expense ratio, its assets under management (AUM), and its year to date performance.
1. Bitwise Crypto Industry Innovators ETF
Ticker: BITQ
AUM: $94m
Expense Ratio: 0.85%
YTD: 147.79%
Launched in 2001, the Bitwise Crypto Industry Innovators ETF is sponsored by Bitwise Asset Management.
It tracks the Bitwise Crypto Industry Innovators 30 Index, made up of a number of companies seen as leaders in blockchain and cryptocurrency innovation.
This includes those involved in blockchain infrastructure, cryptocurrency mining, and decentralised finance (DeFi).
Some of its top holdings include Northern Data and Riot Platforms.
With a diversified investment strategy, the fund aims to capture the growth potential of these innovative companies within the crypto space.
Visit Bitwise Crypto Industry Innovators ETF
2. Global X Blockchain ETF
Ticker: BKCH
AUM: $70.65m
Expense Ratio: 0.50%
YTD: 144.85%
The second fund on this best crypto ETF list is the Global X Blockchain ETF. This was launched in 2021 by Global X ETFs, a member of the Mirae Asset Financial Group.
The fund's strategy involves investing in companies at the forefront of innovation in blockchain solutions.
This includes those that deal in cryptocurrency transactions and mining, blockchain applications and hardware, and blockchain technology integration.
The Global X Blockchain ETF tracks the Solactive Blockchain Index.
3. Siren Nasdaq NexGen Economy ETF
Ticker: BLCN
AUM: $64.68m
Expense Ratio: 0.68%
YTD: 4.82%
A somewhat more established crypto ETF, the Siren Nasdaq NexGen ETF was launched in 2018.
Much like the Global X Blockchain ETF, this fund focuses on companies involved in the research, development, and adoption of blockchain technology.
It has a number of notable names in its holdings, including fintech companies like Block and PayPal, as well as tech giants like Microsoft.
Part of Siren ETFs by SRN Advisors, it tracks the Nasdaq Blockchain Economy Index.
Visit Siren Nasdaq NexGen Economy ETF
4. Valkyrie Bitcoin Miners ETF
Ticker: WGMI
AUM: $20.37m
Expense Ratio: 0.75%
YTD: 150.34%
The Valkyrie Bitcoin Miners ETF is issued by Valkyrie Funds and is the newest in this list of top crypto ETFs, launched in 2022.
As its name suggests, this fund invests in companies specifically involved in Bitcoin mining.
To be considered for the fund, a company must earn at least 50% of its income either from mining Bitcoin itself, or by providing solutions and services to companies that do.
The Valkyrie Bitcoin Miners ETF does not track an index, meaning its investment strategy is actively managed by the fund's portfolio managers.
Visit Valkyrie Bitcoin Miners ETF
5. Amplify Transformational Data Sharing ETF
Ticker: BLOK
AUM: $462.31m
Expense Ratio: 0.75%
YTD: 59.06%
The final entry in this top cryptocurrency ETF list is issued by Amplify Investments and has been on the scene since 2018.
This is another crypto ETF that invests in companies involved in blockchain but this time with a specific focus on those that develop and deploy data sharing technologies.
Of all the funds in this cryptocurrency ETF list, the Amplify Transformational Data Sharing ETF has the greatest amount of assets under management at over $400m.
For investors, this typically means greater liquidity, meaning you can buy or sell shares more easily on the market without significantly impacting the ETF's price.
Visit Amplify Transformational Data Sharing ETF
What Is a Crypto ETF?
A cryptocurrency exchange-traded fund, or crypto ETF, is a financial product that tracks the performance of one or more digital currencies or associated assets.
To get to grips with how these investments work, it’s useful to understand the basics of the cryptocurrency market itself and the concept of an ETF.
First up, the cryptocurrency market is a decentralised digital financial market where various cryptocurrencies are bought, sold and traded.
It operates 24/7, with traders investing through cryptocurrency exchanges, and is known for its high volatility.
An exchange traded fund (ETF), meanwhile, is a type of investment fund traded on stock exchanges.
ETFs are designed to provide investors with exposure to a diverse range of assets, like stocks and bonds.
They offer a convenient way to gain access to the performance of a particular asset or a group of assets without directly owning them.
A crypto ETF has the characteristics of traditional ETFs but is specifically tailored to the cryptocurrency market.
It gives investors the opportunity to benefit from potential returns related to crypto, without the need to directly hold or manage digital assets.
Types of Crypto ETF
Before you invest in a crypto ETF, it’s important to understand the different types available and how each might suit your investment preferences.
Single Asset Crypto ETF
Single asset crypto ETFs focus on tracking the performance of a specific digital currency, like Bitcoin or Ethereum.
Investors can gain exposure to the price movements of a single cryptocurrency without holding it directly.
For instance, a single asset crypto ETF might closely mirror the price fluctuations of Bitcoin, offering a straightforward way for investors to participate in the potential gains of a particular digital asset.
Multi Asset Crypto ETF
Multi asset crypto ETFs provide diversified exposure to a basket of digital currencies within a single fund.
By holding a mix of various cryptocurrencies, these ETFs aim to spread risk and reduce the impact of poor performance from any single digital asset.
This type appeals to investors seeking broader exposure to the cryptocurrency market while avoiding concentration in a specific coin.
Industry Crypto ETF
Rather than investing in actual cryptocurrency, these funds hold a diversified portfolio of digital assets or stocks related to the wider industry.
For example, an industry crypto ETF might track the performance of cryptocurrency exchanges or companies involved in blockchain technology.
This allows investors to participate in the broader impact of cryptocurrencies across various industries and technological innovations.
It’s important to note that not all types of crypto ETFs, including UK crypto ETFs, are universally available.
Regulatory considerations vary by country, and certain types of ETFs may be restricted or unavailable in specific regions.
The Financial Conduct Authority (FCA), for example, is yet to authorise UK crypto ETFs, though they are more readily available across Europe as a whole, and there’s a growing number of crypto ETFs available to US traders.
As interest continues to grow, it’s anticipated these funds will become more widely available, and there may be future opportunities in the UK cryptocurrency ETF market.
How to Invest in a Crypto ETF
Step 1. Pick a Brokerage Platform
Select a reputable brokerage platform that offers a range of crypto ETFs. Ensure the platform aligns with your preferences in terms of user interface, fees, and available investment options.
Step 2. Consider Your Investment Objectives
Clearly define your investment objectives. Determine whether you seek long-term growth, income, or a balance of both.
Different crypto ETFs cater to various investment goals.
Step 3. Know the Associated Costs
Understand the costs associated with both the chosen ETF and the platform you use for trading. Be aware of transaction fees, management fees, and any other expenses that may impact your returns.
Step 4. Assess Your Risk Tolerance
Cryptocurrencies and associated assets are known for their volatility and can experience significant price fluctuations. Ensure your risk tolerance aligns with the potential ups and downs of the chosen crypto ETF.
Step 5. Consider Expense Ratios
Pay attention to the expense ratios of the crypto ETFs you’re considering. Lower expense ratios are generally preferable, as they leave a higher percentage of returns in your pocket.
Step 6. Look at Performance Metrics
Analyse performance, including historical returns and year-to-date performance. While past performance is not indicative of future results, it can offer insights into how well the ETF has tracked its underlying assets.
Yes, Cryptocurrency ETFs exist. These financial products track crypto market performance, allowing investors regulated access without directly owning digital assets.
Examples include Bitwise Crypto Industry Innovators ETF and Amplify Transformational Data Sharing ETF.
A cryptocurrency ETF is a financial product that tracks the performance of one or more cryptocurrencies, or assets associated with the cryptocurrency industry.
It gives investors access to the crypto market through traditional stock exchanges and without the need to directly own digital assets.
The best ETF for Bitcoin may vary based on individual preferences and investment goals.
Notable options include Valkyrie Bitcoin Strategy ETF (BTF) and Bitwise Crypto Industry Innovators ETF (BITQ), both providing exposure to Bitcoin-related investments.
Yes, there are crypto index funds, like the Bitwise 10 Crypto Index Fund (BITW), which tracks a diversified basket of major cryptocurrencies.
These funds provide a way to invest in a broad cross-section of the cryptocurrency market, but are only available in certain jurisdictions.
How you invest in crypto is a matter of personal preference.
ETFs offer diversified exposure and regulatory oversight, making them suitable for some investors.
However, direct cryptocurrency investment provides ownership and potential higher returns for those willing to risk market volatility.
Select a platform and define your objectives and risk tolerance. Analyse past performance of the ETF and never invest more than you can afford to lose.
Note that not all types, including UK crypto ETFs, are universally available, but there may be future opportunities in the UK cryptocurrency ETF market.
Final Thoughts
The cryptocurrency market is a dynamic and evolving space, offering diverse investment opportunities inclusive of a growing number of crypto ETFs.
Keep in mind, though, that a crypto ETF can exhibit high volatility and investing in one involves risk.
Never invest more than you’re willing to lose and regularly reassess your investment strategy based on market conditions.
WikiJob does not provide tax, investment or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.
