3 Best Cryptocurrency ETFs to Buy Now and Hold Long-Term

New spot launch bitcoin (BTC 0.28%) January’s ETFs were a watershed moment for the cryptocurrency industry. Arguably, this was the biggest new product launch on Wall Street in nearly 30 years. A new ETF opens up cryptocurrency investing for individual investors, making Bitcoin as easy to buy and sell as a technology stock.

In the process, these new spot Bitcoin ETFs have opened up a debate about how best to build and diversify a long-term cryptocurrency portfolio. In some cases, investing in multiple companies or cryptocurrencies can be more effective than picking winners in volatile industries. With that in mind, let’s take a closer look at three top cryptocurrency ETFs you can buy and hold for the long term.

iShares Bitcoin Trust

There are nearly a dozen new spot Bitcoin ETFs to choose from, but the clear leader right now is the Bitcoin ETF. iShares Bitcoin Trust (go -1.25%). It currently has over $17 billion in assets under management and an expense ratio of just 0.25%. Source of ETF black stoneThe world’s largest asset management company.

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Of course, there isn’t much difference between the best Bitcoin ETFs. They all only hold a single asset, Bitcoin, and they try to do this as cheaply and efficiently as possible. In my view, the two points of differentiation are size (assets under management) and fees.

On both counts, iShares Bitcoin Trust excels. This is the largest of the new spot Bitcoin ETFs, and its 0.25% expense ratio is now the industry standard (although you can find slightly cheaper fees using Ark Invest, which offers an expense ratio of 0.21% for ETFs).

Bitwise 10 Cryptocurrency Index Fund

If you’re investing in cryptocurrency, you’ll likely want to diversify beyond Bitcoin at some point. One way to do this is Bitwise 10 Cryptocurrency Index Fund (BITW -0.47%). This exchange-traded fund tracks a diverse mix of the top 10 cryptocurrencies, weighted by market capitalization and rebalanced monthly. It is one of the largest cryptocurrency-focused ETFs, with approximately $1.1 billion in assets under management.

Given this ETF’s emphasis on market capitalization, Bitcoin makes up a whopping 68% of the fund’s holdings. Ethereum (ETH -0.79%) It accounts for another 23%. Solana (brush -0.71%) and XRP (XRP -0.14%) It accounts for another 5.2%. All other cryptocurrencies have a weight of less than 1%.

Please keep in mind. If you already have a large position in Bitcoin, either directly or indirectly (e.g. through the iShares Bitcoin Trust), you may not be able to get nearly all of the diversification benefits you thought you would get. Yes, the fund holds 10 cryptocurrencies. However, Bitcoin makes up the largest portion of the fund’s holdings.

Once the newly approved spot Ethereum ETF begins trading, one could make the argument that buying Bitcoin and Ethereum ETFs will be simpler and more cost-effective. It really depends on how much exposure you want to have to smaller, lesser-known cryptocurrencies, which can help round out a diversified portfolio.

Innovative data sharing ETF expansion

Finally, it’s worth thinking about how you might gain exposure to companies within the blockchain and cryptocurrency sector. This includes exposure to Bitcoin mining companies as well as cryptocurrency exchanges and blockchain payment companies.

One good option here is Innovative data sharing ETF expansion (block it 1.22%), which provides access to a wide range of over 50 blockchain and cryptocurrency assets. Currently, the fund’s largest holdings are: Coinbase Global, robinhood marketand MicroStrategy. We also invest in the following Bitcoin mining companies: Marathon Digital Holdings And blockchain payment companies block it.

In theory, you could purchase all of these cryptocurrency stocks individually, but it may be cheaper and more efficient to let an ETF handle it for you. With an expense ratio of just 0.76%, the fund’s holdings appear to be balanced among the best-in-class companies driving innovation in the cryptocurrency market. No single company accounts for more than 5% of the fund’s holdings.

Diversify with ETFs

Most likely, Wall Street is not yet done with new ETF offerings for cryptocurrency investors. If the new spot Ethereum ETF performs similarly to the performance of the new spot Bitcoin ETF, the process will likely continue with other single cryptocurrency ETF products.

Blending these single cryptocurrency ETF products with ETFs that provide broader exposure to the blockchain sector can provide even greater diversification benefits. Don’t forget to look under the hood before you buy. If you like the fund’s holdings and don’t mind the expense ratios, these cryptocurrency ETFs can be a fantastic way to diversify your portfolio and build wealth over the long term.