As we enter the 2nd quarter of 2022, Bitcoin and cryptocurrencies continue to show volatility in their value. Still, even though most coins in the market are in a decline these days, investors are getting more options and opportunities to invest in.
It’s only a matter of time before more people realize the potential value of blockchain technology and the real-life application of cryptocurrencies. Even if you’re a little hesitant about directly owning digital currencies, you can invest in far safer opportunities called exchange-traded funds (ETFS). To help you consider the right ETF to invest in, here are 10 Bitcoin and cryptocurrency ETFs you should know about.
Bitwise Crypto Industry Innovators ETF (BITQ)
The Bitwise Crypto Industry Innovators ETF (BITQ) is a passively managed blockchain fund that tracks the performance of around 30 stocks of companies that are deeply involved in cryptocurrency markets, including exchanges, financial services, and mining equipment suppliers.
Although 85% of BITQ’s net holdings in the index account are focused on the stocks of crypto companies, Bitwise also has holdings of up to 15% in large-cap firms with diversified business activities that have at least one major business line focused on the crypto economy. You can see more on the website MyCryptoBank.
Global X Blockchain ETF (BKCH)
Like most blockchain ETFs, BKCH is a passively managed fund that has a diverse array of holdings in companies that can benefit from the adoption of cryptocurrency and blockchain technology. Apart from having approximately 12.80% of its net assets in Coinbase, BKCH’s top holdings also include shares of Riot Blockchain Inc. and Marathon Digital, which are both operating large scale bitcoin mining facilities.
As of March 2022, BKCH holds a concentrated portfolio of 25 companies. Although most of its holdings focus on developing blockchain technology, and mining companies, BKCH also has some of its net assets in major tech companies like PayPal and Nvidia.
ProShares Bitcoin Strategy ETF (BITO)
It was launched in October 2021, is the first U.S. ETF to provide investors with exposure to Bitcoin futures. It’s important to note that even though BITO is an exchange traded fund that is focused on crypto, it does not directly invest in Bitcoin or other crypto assets.
Instead, the fund invests in Bitcoin futures contracts, which are only traded on the Chicago Mercantile Exchange. In addition, the ETF can also invest in U.S. Treasury Bills and Repurchase Agreements. BITO is an ETF worth considering since it has massively helped the adoption and relevancy of digital currencies in the financial market.
Siren Nasdaq NexGen Economy ETF (BLCN)
The Siren Nasdaq NexGen Economy ETF (BLCN) is a passively managed ETF that tracks the performance of the Nasdaq Blockchain Economy Index, which is made up of stocks that help develop blockchain technology or utilize it for large-scale business activities. As of March 2022, the fund has more than 60 holdings and approximately 46% of its assets are invested in technology-based companies.
The interesting thing about BLCN is that it has a well-diversified portfolio and it operates pretty much as a global fund. The top 10 holdings of the fund account for only around 20% of its overall assets. And in contrast to other crypto ETFs, some of the top holdings of BKCH include popular names like International Business Machines (IBM), Hewlett Packard Enterprise (HPE) and American Express (AXP).
VanEck Bitcoin Strategy ETF (XBTF)
The VanEck Bitcoin Strategy ETF (XBTF) is an actively managed fund that was launched in November 2021.this fund aims to track the price of Bitcoin by allocating its assets to Bitcoin futures. And in addition to Bitcoin futures contracts, XBTF invests some of its assets in Treasuries and cash.
Since the fund is established as a C-corp, some investors might find XBTF more advantageous in terms of tax distribution than other similar ETFs. Although XBTF is far from BITO’s number of assets under management, the fund has a 0.65% expense ratio, which is 30 basis points lower than BITO.
Valkyrie Bitcoin Strategy ETF (BTF)
Similar to XBTF and BITO, The Valkyrie Bitcoin Strategy ETF (BTF) is an actively managed ETF that launched in October 2021. Although this ETF primarily aims to invest much of its net assets in Bitcoin futures contracts, it also invests some of its assets in U.S. government securities, money market funds, and corporate bonds.
Unlike the other two we mentioned, BTF provides far less exposure to Bitcoin and crypto companies. However, Valkyrie also offers other ETFs that can gain more exposure to cryptocurrencies.
Viridi Cleaner Energy Crypto Mining & Semiconductor ETF (RIGZ)
The Viridi Cleaner Energy Crypto Mining & Semiconductor ETF is a fund that launched in July 2021. Rather than focusing on the development of blockchain technology and other sectors, this fund invests in companies that are developing the technology used by crypto miners.
Since the sustainability of crypto mining is a major concern among investors, RIGZ also invests its assets in entities that are actively developing sustainable solutions to the energy consumption of blockchain technology. RIGZ’s top holdings include Marathon Digital Holdings, Core Scientific Inc., and Bitfarms LTD/Canada.
Amplify Transformational Data Sharing ETF (BLOK)
The Amplify Transformational Data Sharing ETF is an actively managed fund that invests in stocks that are developing or using blockchain technologies. BLOK primarily invests in capital markets, crypto mining companies, and developers of blockchain applications. As of February 2022, the ETF has more than 45 holdings, the top 10 of which account for about 40% of the net assets.
Although most of BLOK’s holdings are in companies that are involved in blockchain technologies and software, the fund also has a reasonably sized portfolio in other sectors, including IT services, financial services, and semiconductors and equipment. The notable top three holdings of this fund include Silvergate Capital, SBI Holdings, and Coinbase.
Capital Link Global Fintech Leaders ETF (KOIN)
Capital Link Global Fintech Leaders ETF (KOIN) is a passive fund that aims to duplicate the performance of the AF Global Fintech Leaders Index and track the performance of digital asset companies and fintech solutions providers.
Since the fund is run by a Hong Kong based holding company, most of its holdings are different from other cryptocurrency funds. As of March 17, 2022, the fund has 40 holdings and the top three holdings are BUNGE Ltd, HSBC Holding, and HIS Co Ltd.
First Trust Sky Bridge Crypto Industry & Digital Economy ETF (CRPT)
The First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT) is an actively managed fund that aims to allocate at least 80% of its net assets to companies that are active in the crypto economy.
As of March 2022, CRPT owns shares of 30 stocks, and around 68% of its assets are in its top 10 holdings. Like most of the ETFs on our list, CRPT has a concentrated portfolio that targets IT services, software, and capital markets.