ETFs might be attractive if you’re searching for controlled investments with reasonable costs, but few are available for cryptocurrencies. The cause is that the U.S. Securities and Exchange Commission hasn’t even agreed on publicly listing exchange-traded funds (ETFs)based on Bitcoin spot prices, so cryptocurrencies are a less popular option.
Instead, factors such as potential contracts drive price movement for cryptocurrency ETFs. Here’s all you need to know about your options for cryptocurrency ETFs.
The launch of the initial Bitcoin ETF at the end of2021 generated a lot of enthusiasm in the cryptocurrency community. The action was interpreted by many as indicating that digital assets were growing more popular.
It’s also important to remember that Bitcoin ETFs don’t provide you with diverse gates to the world of crypto as they only have exposure to one cryptocurrency. Another choice is to buy Bitcoin if you want to learn more about it (even though you cannot do the same with your brokerage account).
Some examples include:
Global X Blockchain and Bitcoin Strategy ETF (BITS): By investing in Bitcoin futures contracts and domestic and international blockchain enterprises, the Global X Blockchain and Bitcoin Strategy ETF (BITS) seeks to profit from the long-term expansion of blockchain technology. The Global X Blockchain ETF is the BITS ETF’s biggest position, accounting for around 45% of its portfolio, and it now has over $7 million in total net assets (BKCH).
Grayscale Bitcoin Trust (GBTC): The goal of the Grayscale Bitcoin Trust (GBTC) is to reflect the true price of Bitcoin with fewer charges and expenditures. The sole securities in GBTC are passive Bitcoin investments, and the fund presently has over $10 billion in assets under management.
Pro Shares Bitcoin Strategy ETF (BITO): By investing in Bitcoin futures contracts, this actively managed fund aims to give investors financial appreciation. The fund’s overall net assets exceed $576 million, and most of its holdings are U.S. Treasury bills and Bitcoin futures contracts.
Cryptocurrency Stock ETFs
Some ETFs combine the shares of various businesses with bitcoin holdings or other cryptocurrency-related activities. These ETFs are connected to the cryptocurrency market but do not own any cryptocurrency. Instead, they own stock in firms that have made cryptocurrency investments or whose operations include mining, trading, or other cryptocurrency-related activities.
Some examples include:
Amplify Transformational Data Sharing EFT (BLOK): This blockchain-focused investment fund currently has $416 million in net assets. The financial services firm CME Group, which deals with products like Bitcoin and Ethereum, and Coinbase Global Inc. are two examples of the Amplify fund’s portfolio of cryptocurrency equities.
First Trust Indxx Innovative Transaction & Process EFT (LEGR): This fund seeks to mimic the investing results of the Indxx Blockchain index. The LEGR ETF holds companies that are creating or utilizing blockchain technology. The main holdings in this fund, which now has net assets of over $118 million, are Infineon Technologies, AT&T Inc., and Honeywell International Inc.
Siren NASDAQ Economy (BLCN): It invests in businesses committed to blockchain technology research, development, and implementation. The top holdings in this fund, which has net assets of over $110 million, are JPMorgan Chase & Co., Mastercard Inc., and Oracle Corp.
The risks associated with cryptocurrency ETFs, such as volatility and regulatory uncertainty, should be considered. Before making any investment selections, like with any investment, it’s crucial to do extensive research and speak with a financial expert.