10 Best Cryptocurrency ETFs To Buy

Investing in cryptocurrency can be difficult sometimes, but ETFs offer a more stable way to get in on the action. Here are 10 best cryptocurrency ETFs to buy in 2024.

1. Grayscale Bitcoin Trust (GBTC)

The Grayscale Bitcoin Trust is one of the most popular and well-established crypto ETFs on the market. It provides investors with exposure to Bitcoin without having to buy, store, and secure the cryptocurrency directly.

Key benefits of GBTC include:

• Traded on the OTCQX, an over-the-counter market
• Enables investors to gain exposure to Bitcoin in their tax-advantaged accounts
• Managed by a trusted authority in digital currency investing

Please note that GBTC often trades at a premium to its underlying Bitcoin holdings.

2. ProShares Bitcoin Strategy ETF (BITO)

This was launched in October 2021, BITO was the first Bitcoin futures ETF approved in the United States. Rather than holding Bitcoin directly, BITO invests in cash-settled front-month Bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME).

Advantages of investing in BITO:

• Offers investors Bitcoin exposure through a regulated and familiar ETF structure
• Can be bought and sold like any other stock throughout the trading day
• Does not require a crypto wallet or managing any keys

3. Valkyrie Bitcoin Strategy ETF (BTF)

The Valkyrie Bitcoin Strategy ETF is another futures-based ETF that began trading shortly after BITO in October 2021. Like BITO, BTF invests in front-month CME Bitcoin futures contracts, but it also has the flexibility to invest in second-month contracts and instruments like options and swaps.

Potential benefits of BTF:

• Provides exposure to Bitcoin with the liquidity and transparency of an ETF
• Offers slightly more flexibility compared to BITO
• Managed by a team with deep expertise in digital assets

As with any futures-based ETF, BTF’s performance can deviate from spot Bitcoin prices due to factors like rolling costs and contango.

4. VanEck Bitcoin Strategy ETF (XBTF)

The VanEck Bitcoin Strategy ETF is another option for investors seeking exposure to Bitcoin through an ETF. Like BITO and BTF, XBTF invests in cash-settled Bitcoin futures contracts traded on the CME.

Key features of XBTF:

• Offers a cost-effective way to gain exposure to Bitcoin, with a net expense ratio of 0.65%
• Provides the benefits of an ETF, including transparency, liquidity, and regulatory oversight
• Managed by a firm with a long history of innovative ETF solutions.

Related: 10 Best Bitcoin ETFs in 2024

5. Bitwise 10 Crypto Index Fund (BITW)

The Bitwise 10 Crypto Index Fund is a market-cap-weighted ETF that aims to track the performance of the 10 largest cryptocurrencies. As of March 2023, the fund’s top holdings included Bitcoin, Ethereum, Cardano, Solana, and Polygon.

Advantages of investing in BITW:

• Provides diversified exposure to the cryptocurrency market
• Rebalanced monthly to adapt to changes in the crypto landscape
• Managed by a company specializing in crypto asset management.

6. Grayscale Digital Large Cap Fund (GDLC)

The Grayscale Digital Large Cap Fund is another diversified crypto ETF that holds a basket of large-cap digital assets. As of February 2023, GDLC’s portfolio consisted of Bitcoin, Ethereum, Cardano, Solana, and Avalanche.

Key benefits of GDLC:

• Offers exposure to a diverse range of established cryptocurrencies
• Managed by Grayscale, a well-known name in digital currency investing
• Provides a way to invest in multiple cryptocurrencies without having to buy and manage them individually

Like BITW, GDLC is currently traded on over-the-counter markets and not on a major U.S. exchange.

7. Amplify Transformational Data Sharing ETF (BLOK)

The Amplify Transformational Data Sharing ETF is an actively managed ETF that invests in companies involved in the development and utilization of blockchain technologies. BLOK’s portfolio includes a mix of blockchain infrastructure providers, cryptocurrency miners, and companies using blockchain to enhance their business operations.

Reasons to consider BLOK:

• Offers exposure to the growth potential of blockchain technology
• Actively managed to capitalize on emerging opportunities in the blockchain space
• Provides a way to invest in blockchain without direct exposure to cryptocurrency volatility.

8. Siren Nasdaq NexGen Economy ETF (BLCN)

The Siren Nasdaq NexGen Economy ETF is another blockchain-focused ETF that invests in companies committed to developing, researching, or utilizing blockchain technology. BLCN tracks the Nasdaq Blockchain Economy Index, which includes companies across a range of industries, from tech giants to crypto miners.

Advantages of investing in BLCN:

• Provides exposure to the potential growth of blockchain technology across various sectors
• Tracks an index designed to capture the performance of key players in the blockchain economy
• Offers a way to invest in blockchain innovation without direct cryptocurrency exposure

9. First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT)

The First Trust SkyBridge Crypto Industry and Digital Economy ETF is an actively managed ETF that invests in companies driving innovation in the crypto industry and digital economy. CRPT’s portfolio includes a mix of companies directly involved in cryptocurrency, as well as those leveraging blockchain technology to revolutionize traditional business models.

Key features of CRPT:

• Actively managed to identify companies at the forefront of the crypto and digital economy
• Provides exposure to both direct crypto-related businesses and those utilizing blockchain tech
• Managed by a team with expertise in traditional and digital asset markets

As an actively managed fund, CRPT’s expense ratio may be higher than some passively managed ETFs.

10. Bitwise Crypto Industry Innovators ETF (BITQ)

The Bitwise Crypto Industry Innovators ETF is another option for investors looking to gain exposure to the crypto industry. BITQ invests in companies that derive significant revenue from cryptocurrency-related activities, such as crypto exchanges, miners, and infrastructure providers.

Reasons to consider BITQ:

• Offers targeted exposure to companies directly involved in the cryptocurrency industry
• Tracks an index designed to capture the performance of key crypto innovators
• Managed by a company with a focus on crypto asset management

Key Takeaway

1. Cryptocurrency ETFs offer a more stable and regulated way to invest in digital assets compared to buying cryptocurrencies directly.

2. There are various types of crypto ETFs, including those that invest in Bitcoin futures, those that hold a diversified basket of cryptocurrencies, and those that focus on companies involved in blockchain technology.

3. Bitcoin futures ETFs, such as BITO, BTF, and XBTF, provide exposure to Bitcoin through regulated futures contracts traded on the CME.

4. Diversified crypto ETFs, like BITW and GDLC, invest in a market-cap-weighted basket of major cryptocurrencies, offering broad exposure to the digital asset space.

5. Blockchain industry ETFs, such as BLOK, BLCN, CRPT, and BITQ, invest in companies that are developing or using blockchain technology, providing exposure to the growth potential of the blockchain industry.

6. When considering investing in a cryptocurrency ETF, it’s important to evaluate factors such as the fund’s structure, holdings, management team, expense ratio, and overall investment strategy.

7. As with any investment, it’s crucial to conduct thorough research, understand the risks involved, and consider consulting with a financial advisor before making investment decisions in the crypto space.

Frequently Asked Questions

1. What is a cryptocurrency ETF?

A cryptocurrency ETF is an exchange-traded fund that invests in digital assets, such as Bitcoin or Ethereum, or in companies involved in the cryptocurrency and blockchain industries. These ETFs provide investors with exposure to the crypto market without having to buy, store, and manage cryptocurrencies directly.

2. What are the benefits of investing in a cryptocurrency ETF?

Some of the main benefits of investing in a cryptocurrency ETF include:

• Increased accessibility to the crypto market for traditional investors
• Enhanced liquidity and transparency compared to buying cryptocurrencies directly
• Potential for diversification across multiple digital assets or blockchain-related companies
• Professional management and regulatory oversight

3. What types of cryptocurrency ETFs are available?

There are several types of cryptocurrency ETFs, including:

• Bitcoin futures ETFs that invest in regulated Bitcoin futures contracts
• Diversified crypto ETFs that hold a basket of major cryptocurrencies
• Blockchain industry ETFs that invest in companies developing or utilizing blockchain technology

4. Are cryptocurrency ETFs safe?

While cryptocurrency ETFs are subject to regulatory oversight and provide a more secure way to invest in digital assets compared to buying cryptocurrencies directly, they still carry risks. The crypto market is known for its volatility, and the value of crypto ETFs can fluctuate significantly. As with any investment, it’s essential to understand the risks and conduct thorough research before investing.

5. How do I invest in a cryptocurrency ETF?

To invest in a cryptocurrency ETF, you’ll need to have a brokerage account with a firm that offers access to the ETF you’re interested in. Once you’ve opened and funded your account, you can buy and sell shares of the crypto ETF just as you would with any other stock or ETF.

6. Are cryptocurrency ETFs suitable for all investors?

Cryptocurrency ETFs may not be suitable for all investors. The crypto market is highly volatile and can be influenced by various factors, including regulatory changes, technological developments, and market sentiment. Investors should consider their risk tolerance, investment goals, and overall financial situation before investing in crypto ETFs. Consulting with a financial advisor can help you determine whether crypto ETFs are appropriate for your investment portfolio.