What is Crypto ETF?
A crypto ETF is a type of exchange-traded fund that gives investors exposure to cryptocurrency and digital assets by allowing them to buy and sell shares on traditional stock exchanges. Crypto ETFs are designed to track the performance of one or more cryptocurrencies or to provide exposure to related technologies, allowing investors to gain indirect exposure to cryptocurrency without directly owning it.
How Crypto ETF Work?
A cryptocurrency exchange-traded fund (ETF) is a financial instrument that tracks the performance of a single cryptocurrency or a group of cryptocurrencies. Shares of the ETF can be purchased and sold on traditional stock exchanges, allowing investors to gain exposure to the cryptocurrency market without directly owning the digital assets. The value of the ETF is typically linked to the underlying cryptocurrency prices or a specific index, and it aims to replicate the performance of the selected cryptocurrency or group of cryptocurrencies. This allows investors to diversify their portfolios, mitigate some of the risks associated with individual cryptocurrencies, and trade these funds like traditional stocks on regulated stock exchanges.
The structure of crypto ETFs varies, but they generally provide a more accessible and familiar investment vehicle for those seeking exposure to the crypto market without the complexities of directly owning and managing digital assets.
Top 10 Crypto ETFs in 2024
1. Amplify Transformational Data Sharing ETF (BLOK)
The Amplify Transformational Data Sharing ETF is one of the biggest funds devoted to the cryptocurrency and digital asset economy, with assets exceeding $400 million. Even though it doesn’t invest directly in cryptocurrencies, it’s a good place to start your search for the top ETFs in the crypto industry.
Rather, it includes 45 shares of the company. The fund’s top holdings are:
- MICROSTRATEGY INC (5.04%)
- MARATHON DIGITAL HOLDINGS INC COM (5.00%)
- COINBASE GLOBAL INC (4.52%)
- BEYOND INC (3.98%)
- GALAXY DIGITAL HOLDINGS LTD (3.56%)
- BI HOLDINGS INC (3.42%)
- RIOT PLATFORMS INC (3.19%)
- CLEANSPARK INC (2.94%)
- BITFARMS LTD/CANADA (2.83%)
- PAYPAL HLDGS INC (2.82%)
2. Bitwise 10 Crypto Index Fund
The Bitwise 10 Crypto Index Fund is a one-of-a-kind offering on this list. It was originally a private placement fund, but shares can now be purchased and sold over the counter. Because the fund is actively managed, it has a high expense ratio of 2.5% (or $25 in annualized deducted fees from fund performance per $1,000 invested).
The Bitwise 10 Crypto Index Fund invests in the top ten cryptocurrencies (as measured by market cap) and is rebalanced monthly to account for changes in cryptocurrency prices. Because Bitcoin and Ethereum are by far the largest cryptocurrencies in terms of size, they account for more than 90% of the underlying portfolio. Other holdings include:
3. Siren Nasdaq NexGen Economy ETF
The Siren Nasdaq NexGen Economy ETF is another fund that focuses on companies that develop and use blockchain technology. Its assets under management are far smaller than those of Amplify’s comparable ETF product, but it does offer a slightly different perspective in this space.
For starters, the ETF includes more than 60 stocks. It includes some general technology companies with a crypto or blockchain segment, such as IBM (IBM 1.24%), which is a top holding.
It also includes shares of traditional lenders and digital payment networks such as Block (SQ 3.51%) and Visa (V 1.1%) that have begun dabbling in the world of cryptocurrency. It’s a far more diverse way of betting on the growth of the crypto industry.
- COINBASE GLOBAL INC (4.75%)
- MARATHON DIGITAL HOLDINGS INC COM (4.70%)
- MICROSTRATEGY INC (4.41%)
- GALAXY DIGITAL HOLDINGS LTD (4.31%)
- BLOCK INC (2.98%)
- ACCENTURE PLC IRELAND (2.98%)
- Cash & Other (2.50%)
- CUSTOMERS BANCORP INC (2.33%)
- CANAAN INC (2.23%)
- INTERNATIONAL BUSINESS MACHS COM (2.18%)
4. First Trust Indxx Innovative Transaction & Process ETF
Another large crypto bet is the First Trust Indxx Innovative Transaction & Process ETF. The fund contains over 100 stocks, making it the most diverse crypto ETF on this list.
First Trust is also a large and well-established company that has created a wide range of investment products, which may satisfy some investors concerned about track record and fund manager reputation. The annual expense ratio of the First Trust Indxx Innovative Transaction & Process ETF is 0.65%, making it one of the more affordable options on the market.
The fact that this ETF is more diverse has both advantages and disadvantages. It offers broad exposure to the crypto space, including many international tech companies that may be more difficult to find for US-based investors (Chinese companies account for 12% of the portfolio).
It’s also less volatile than many of its cryptocurrency fund competitors. That is, when the crypto market is doing well, its value does not typically increase as much as the values of other funds, but it also does not lose as much value during bear markets.
- Advanced Micro Devices, Inc. (1.66%)
- Intel Corporation (1.57%)
- AT&T Inc. (1.53%)
- Micron Technology, Inc. (1.53%)
- Nordea Bank Abp (1.52%)
- Deutsche Telekom AG (1.47%)
- Engie S.A.1.46%Salesforce, Inc. (1.44%)
- Capgemini SE (1.43%)
- Infineon Technologies AG (1.43%)
5. Bitwise Crypto Industry Innovators ETF
The Bitwise Crypto Industry Innovators ETF debuted in May 2021, making it a latecomer to the crypto fund scene. It holds fewer than 30 stocks, with an emphasis on innovators and crypto pioneers.
As a result, this ETF is likely to exhibit some of the wild price swings inherent in cryptocurrency prices. It also has an annual expense ratio of 0.85%, which is relatively high.
This fund’s underlying stocks include many Bitcoin miners and owners. Among the top holdings are:
- MARATHON DIGITAL HOLDINGS 14.23%
- MICROSTRATEGY 9.67%
- COINBASE GLOBAL INC 9.31%
- BITFARMS 5.97%
- APPLIED DIGITAL 4.65%
- GALAXY DIGITAL HOLDI 3.97%
- RIOT PLATFORMS 3.92%
- HUT 8 CORP. 3.79%
- NORTHERN DATA 3.79%
- BAKKT HOLDINGS 3.56%
How To Buy Crypto ETF?
Step 1 – Setting Up a Crypto Wallet
To purchase $BTCETF during its presale, you must have a crypto wallet that supports ERC-20 tokens. MetaMask, a secure and free wallet available for both mobile and web browsers, is a recommended option.
To begin, go to the MetaMask website and download and install the wallet. Once installed, launch MetaMask to create a wallet password.
Writing down and securely storing your seed phrase is critical because it is required to recover your wallet if necessary.
Step 2 – Buying Ethereum (ETH) or Tether (USDT)
During the presale, ETH/USDT cryptocurrency can be exchanged for BTCETF. If you don’t already have any cryptocurrency, many crypto exchanges allow you to buy ETH or USDT using a variety of payment methods, such as credit/debit cards and bank transfers.
Transfer your ETH or USDT to your MetaMask wallet after purchasing them. Investors can also purchase BTCETF with MATIC or BNB, but tokens purchased with these two coins will not be eligible for early staking rewards of more than 140%.
Step 3 – Connecting to the Bitcoin ETF Token ICO
Go to the $BTCETF presale website and select ‘Connect Wallet.’ Then, choose MetaMask and follow the on-screen instructions to connect.
Step 4 – Buy Bitcoin ETF Tokens
Decide how much $BTCETF you want to buy with ETH/USDT/BNB/MATIC. The matching $BTCETF amount, including transaction fees, will be computed by the platform.
To complete the purchase, click ‘Buy $BTCETF Tokens’.
Step 5 – Claiming Your BTCETF Tokens
Tokens purchased during the presale are not immediately available. They become available to buyers following the token generation event.
When the presale is over, buyers can go back to the presale website and click ‘Claim Tokens’ to transfer the tokens to their wallet.
