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That makes choosing a diversified blockchain ETF a less risky way to get exposure to the industry. The blockchain ETFs on our list invest in dozens or even hundreds of stocks, providing plenty of diversification in a single fund. The First Trust SkyBridge Crypto Industry and Digital Economy ETF is digital currency index fund an actively managed fund that launched in September 2021. CRPT aims to invest at least 80% of its net assets in companies active in the cryptocurrency economy. To guide your investments in this new category of ETFs, Forbes Advisor has reviewed the blockchain ETFs available on the market today and filtered them by total assets under management (AUM).
First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT)
Cryptocurrency index funds take the research and decision-making burdens off of individual investors and make it easy to speculate on a broad range of cryptocurrencies at once. By investing in an index fund, investors can gain exposure to a broad https://www.xcritical.com/ range of coins and tokens in a single swoop, rather than having to pick and choose individual assets to invest in. This helps to both diversify risk and reduce the barrier to entry.
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With a few hundred million in assets, BTCO is gathering support that could cement it as one of the few 100% bitcoin funds that might have staying power. That presumes that investors who recently piled in because of the fee waiver don’t bolt if the waiver expires this summer. Invesco Galaxy Bitcoin ETF, another spot bitcoin fund, is on our list because of its generous approach to winning new business. BTCO is waiving its official 0.25% fee to zero for the first six months on the first $5 billion in assets.
First Trust Indxx Innovative Transaction & Process ETF
For some blockchains, that means a majority of nodes confirm that individual crypto coins have not been spent more than once. Alternatively for a logistics company, that could mean different nodes register or verify the receipt or dispatch of shipments. Blockchain is a digital ledger that records data—frequently cryptocurrency transactions, though it can handle any type of data—and distributes it across a broad network of computer systems. It’s worth noting that the VanEck Digital Transformation ETF has good exposure to international stocks. Explore the growing crypto opportunities at Fidelity, including options for both direct and indirect exposure.
ProShares Bitcoin Strategy ETF (BITO)
Prospective investors must not construe the contents of this website as legal, tax, investment, or other advice. Jeff Reeves writes about investments, the stock market, exchange-traded funds and retirement topics. A veteran journalist with extensive capital markets experience, Jeff has covered Wall Street and investing since 2008. Beyond Forbes Advisor, his work has appeared in numerous respected finance outlets including CNBC, Fox Business, The Wall Street Journal digital network, Kiplinger, USA Today and CNN Money. One factor that makes futures markets popular with some investors is the potential for “leverage”—in other words, the ability to trade with borrowed cash to supercharge your bets.
Note that futures, in general, and especially crypto futures, carry much more risk. If you’re looking for an easy way to invest in crypto, a cryptocurrency exchange-traded fund (ETF) could be the solution. The Securities and Exchange Commission (SEC) started approving Bitcoin (BTC 0.05%) and Ethereum (ETH -1.18%) ETFs in 2024, allowing you to invest in the two largest cryptocurrencies. Another big difference between these types of funds is the selection you’ll have available.
That’s not a lot for a marketing budget, regulatory compliance work or other necessary expenses. Bitcoin is a relative newcomer to the world of exchange-traded funds. To put it all together, a cryptocurrency index fund is a fund that invests in a specific index of cryptocurrencies. There haven’t been many successful attempts to build traditional investment vehicles that track multiple types of cryptocurrency.
Considering how popular cryptocurrencies are, we’ll likely see more cryptocurrency index funds in the near future. For the time being, most investors will likely find there are better ways to invest in crypto, including buying individual cryptocurrencies or shares of cryptocurrency stocks. As of April 2023, FDIG owns 31 stocks, 61% in financial services and 37% in the tech industry. Like many blockchain ETFs, this allocation suggests the fund’s portfolio has shifted from direct investments in cryptocurrency technologies to more investments in the digital payments category. Until January 11, due to SEC regulations, bitcoin ETFs could not trade bitcoin at its current, or spot price.
If a company’s free float is less than 10% of the outstanding shares, it, too, is excluded. It eliminates stocks with market caps of less than $250 million and three-month average daily trading of less than $1 million. Cryptocurrencies are still a very new asset class, and ETFs focused on them are even younger. As with any emerging asset class, expect lots of volatility — both in cryptos themselves and in the companies focused on their development. If you want more stability, consider long-term ETFs in other assets, such as stocks or real estate. Launched in November 2021, the Global X Blockchain & Bitcoin Strategy ETF takes a two-pronged approach.
It requires a minimum investment of $1,000 and charges an expense ratio of 1.15%. This website contains an overview summary of the terms of each Product. This website is neither an offer to sell nor a solicitation to buy units or shares in any Product. The summary set forth on this website does not purport to be complete, and is qualified in its entirety by reference to the definitive offering documents relating to each Product. Spot crypto ETPs (FBTC and FETH) are for investors with a high risk tolerance and invest in a single cryptocurrency, which are highly volatile and could become illiquid.
The three biggest stocks by weighting are Coinbase Global and Bitcoin miners MARA Holdings (MARA) and CleanSpark (CLSK). Approximately 60% of the index will comprise crypto and blockchain companies. The maximum weighting for each stock is 22.5%, or the maximum weight that supports $20 million in average daily volume. It then applies a score of 1 for companies actively developing blockchain technology, 2 for companies actively using blockchain technology, and 3 for companies actively exploring blockchain technology. And all companies with zero exposure to blockchain technology are removed before starting the ranking process. Bitcoin futures mimic the daily moves in the value of an asset, in this case, Bitcoin.
Large, established public companies have dabbled in blockchain businesses while smaller, more focused firms have put blockchain and crypto at the core of their operations. In either case, there has yet to be a killer app that has made the case for blockchain as a core part of the future of business and technology. As the world of blockchain ETFs continues to evolve, we will offer a more comprehensive methodology that selects the best from an even larger universe of similar funds.
This first-mover advantage has helped the fund excel in total AUM and overall liquidity. Make sure to check out the fees before investing in a cryptocurrency trust. For example, the Grayscale trusts charge annual fees of 2% to 2.5%, so you’re paying quite a bit for the convenience they offer. As far as funds that buy cryptocurrencies directly, no options have been approved in the U.S. yet. The Bitcoin Strategy ProFund invests in Bitcoin futures contracts.
- An ETF is an investment fund that can be bought just like a stock.
- However, history shows that many ETFs ultimately change to a different strategy or de-list altogether.
- But unlike mutual funds, ETFs are traded directly on a stock exchange like stock in a publicly traded company.
- They tend to invest in a wider variety of assets than bitcoin ETFs or crypto ETFs, which focus more narrowly on tracking the price of individual cryptocurrencies.
- The selection process for the index starts with a global universe of equities in both developed and emerging markets.
Cryptocurrency index funds allow investors to gain diversified exposure to the digital asset market at a relatively lower cost. While cryptocurrencies like bitcoin and Ethereum are the most popular use for blockchain today, the technology offers the potential to serve a very wide range of applications that go well beyond crypto. Take Walmart’s Canadian division, which used blockchain technology to create an automated system for managing invoices and payments for its logistics partners. Launched in April 2022, Fidelity Crypto Industry and Digital Payments ETF is benchmarked to the Fidelity Crypto Industry and Digital Payment Index.
That meant it lacked the highly liquid, smooth redemption mechanism that ETFs enjoy. And as a result, shares often traded at a big premium or discount to the actual value of the underlying bitcoin. Investors are understandably reluctant to pay, say, $1 for 90 cents worth of assets.