Cryptocurrency ETFs have been popping up recently in the stock market and offer a promising avenue to invest, with potentially high ROIs. For all of you who don’t know what an ETF is, a cryptocurrency ETF (exchange-traded fund) is a collection of securities—such as cryptocurrency stocks—that tracks an underlying index. Here is a comprehensive list of the top 5 cryptocurrency ETFs to invest in.
1. Grayscale Bitcoin Investment Trust (GBTC)
Grayscale Bitcoin Investment Trust was one of the first to use the fund structure for giving investors exposure to bitcoin, but just to be clear, Grayscale Bitcoin Investment Trust is not designed to be an ETF. According to Grayscale, GBTC allows investors to gain exposure to the movement of the price of bitcoin via a traditional investment vehicle, all without facing any sort of challenges of buying, storing and keeping the bitcoins safe.
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One of the major drawbacks of using GBTC is paying for the high premiums in addition to the annual fee and also the risk factors that come along with the volatility of the cryptocurrency market. Investors are allowed to access the shares through the market via GBTC. Based on the recent prediction, bitcoin’s price could drop to $6,000 based on the GBTC premium. The expense ratio of GBTC is 2% per year.
2. Grayscale Digital Large Cap Fund
Introduced in February 2018, Grayscale Digital Large Cap Fund largely attracts investors seeking exposure in multiple digital currencies. Grayscale Digitial Large Cap Fund allows investors to get exposure to the movement of the price of a mix of various large-cap digital assets via a traditional investment vehicle without facing any challenges of buying, storing and safekeeping digital assets.
Grayscale Digital Large Cap Fund gives 64% of its weight to Bitcoin. Other components are Ethereum, Cardano, Solana, Litecoin, Chainlink, and other altcoins. The digital asset holdings per share at close as of 24/03/2022 is $28.3.
Grayscale Digital Large Cap Fund composition:
- Bitcoin (BTC) 64%
- Ethereum (ETH) 28%
- Cardano (ADA) 3%
- Solana (SOL) 2.4%
3. Amplify Transformational Data Sharing ETF (BLOK)
The Amplify Transformational Data Sharing ETF is not a devoted bitcoin ETF. In fact, it doesn’t hold any bitcoin. Rather, the digital ledger where all the bitcoin transaction taking place are stored is its playfield. This actively managed fund currently holds 54 stocks and also it is a global fund with over 56% of its total weight assigned to companies that are from outside of North America.
Top 5 Holdings:
- SILVERGATE CAP CORP 5.04%
- GALAXY DIGITAL HOLDINGS LTD 5.04%
- NVIDIA CORPORATION 4.75%
- SBI HOLDINGS INC 4.30%
- COINBASE GLOBAL INC 4.11%
There is a long term case for BLOK because of the large number of industries that are adopting and planning to adopt blockchain technologies. It is also expected to be a keystone in the Internet of Things and connected devices theme.
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4. ARK Innovation ETF (ARKK)
ARK Innovation ETF is an actively managed fund that moves in and out of positions. This means that the fund might eventually renew its bitcoin exposure. ARKK is not a cryptocurrency ETF. The companies that are found in ARKK usually include DNA technologies, industrial innovation in energy, automation, and manufacturing, increased use of shared technology, infrastructure and services and, Fintech innovation.
The typical number of holdings ranges from 35 to 55. ARKK was first incepted on 10/31/2014. ARKK’s expense ratio is 0.75%. It holds net assets of $12.4 Billion as of 25/03/2022.
Top 5 holdings:
- TESLA INC 10.75%
- TELADOC HEALTH INC 7.26%
- ROKU INC 7.08%
- ZOOM VIDEO COMMUNICATIONS-A 6.37%
- COINBASE GLOBAL INC -CLASS A 5.03%
ARKK won the Active ETF of the year during The Mutual Fund Industry and ETF awards 2019.
5. The Bitwise 10 Private Index Fund
The Bitwise 10 Private Index Fund holds as the world’s first crypto-based index fund. It holds the 10 biggest digital currencies. Assets here are stored in 100% cold storage, financially inspected annually, and purchased across several liquidity providers in order to find the best execution. It actively evaluates network opportunities and finds all the available profits for funds investors where appropriate.
The minimum investment is $25,000 with weekly liquidity. All investors must be accredited and U.S-based. The expense ratio is 2.5% and the performance fee is 0%. The coins that are currently in fund:
Note: Before investing in any funds, always conduct your own independent research. Never invest more than you could afford to lose.
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