Top 3 Cryptocurrency ETFs
Last January, the Securities and Exchange Commission approved the first 11 physical Bitcoin exchange-traded funds, which were very popular with investors.
However, this is not the only option for those looking to enter the fast-growing cryptocurrency industry. Several other ETFs invest in companies that serve the industry in some way. These ETFs can be a good option for investors who are wary or unsure about the industry because they provide the opportunity to invest in a variety of stocks rather than picking individual winners.
Here are three of the best cryptocurrency ETFs that invest in various parts of the industry.
One. First Trust SkyBridge Crypto Industry and Digital Economy ETF
As the name suggests, First Trust SkyBridge Crypto Industry and Digital Economy ETF (NYSEARCA:CRPT) invests in companies involved in cryptocurrency or the digital economy.
Cryptocurrency companies included in this ETF must derive at least 50% of their revenue from goods produced or sold, investments, or services performed in the cryptocurrency ecosystem. Additionally, at least 50% of your assets must be directly held in Bitcoin, Ethereum, or other cryptocurrency assets.
Meanwhile, digital economy companies included in this ETF must derive at least 50% of their revenue from goods produced or sold, investments or services performed in the digital economy ecosystem.
SkyBridge Capital actively manages this fund for First Trust, searching for stocks and ADRs of companies it believes have the best opportunities for capital appreciation.
The ETF currently holds 30 stocks, 81% of which are based in the United States. The top three holdings are MicroStrategy (NASDAQ:MSTR), Coinbase Global (NASDAQ:COIN), and Marathon Digital Holdings (NASDAQ:MARA).
The ETF is up about 43% year to date and is trading at $14.90 per share as of March 28, making it accessible with a low entry price. As of March 28th over the past year, it has achieved a return of a whopping 244%. However, illustrating the volatile nature of cryptocurrency stocks, you should be prepared for volatility, as the ETF has plummeted approximately 23% since its launch on September 20, 2021. ETFs also have a fairly high expense ratio of 0.85%.
2. Valkyrie Bitcoin Miner ETF
that much Valkyrie Bitcoin Miners ETF (NASDAQ:WGMI) primarily focuses on companies involved in Bitcoin mining. Actively managed funds invest at least 80% of their assets in companies that derive at least 50% of their revenue from Bitcoin mining operations or companies that provide chips, hardware, software or other services to companies engaged in Bitcoin mining. Invest. Accordingly, semiconductor stocks are included, targeting another high-growth area.
The ETF’s top three holdings are CleanSpark (NASDAQ:CLSK), Marathon Digital, and NVIDIA (NASDAQ:NVDA). Currently only 22 stocks are held.
Year to date, the ETF’s stock price is down about 5%, but over the past year it has returned 125% as of March 28 and is currently trading at $19.26 per share. It has fallen approximately 26% since its launch on February 7, 2022. The ETF’s expense ratio is 0.75%.
3. Schwab Crypto Themed ETF
that much Schwab Crypto Themed ETF (NYSEARCA:STCE) is slightly different from the other two services in a few ways. First, it is passively managed by tracking the performance of its own proprietary Schwab Crypto Thematic Index, resulting in a lower expense ratio than others at 0.3%.
The fund invests in companies that could benefit from the development or exploitation of cryptocurrencies and other digital assets, and business activities linked to blockchain and other distributed ledger technologies.
The second difference with this fund is that it is a bit more diversified than most other cryptocurrency ETFs. Of course, I wouldn’t call it a diversified fund. However, the cryptocurrency fund is slightly broader, with about 50% in technology stocks, 43% in finance, 5% in consumer discretionary, and 2% in communication services.
In total, the Schwab ETF holds about 37 stocks, with MicroStrategy, Coinbase, and CleanSpark being the top three holdings. However, among the top 10 names are financial companies such as Robinhood Markets (NASDAQ:HOOD), Block (NYSE:SQ), and PayPal (NASDAQ:PYPL).
The ETF is up about 24% year to date and is up about 126% in the last 12 months as of March 28. Since its launch on August 3, 2022, the ETF is up about 58%.
Keep in mind that this is considered an aggressive growth investment and can be very volatile. Investors should not invest more than they can afford to lose, and should keep allocations relatively small and part of a broadly diversified portfolio. These ETFs also do not currently have a three-year track record, so their long-term performance has not yet been established.
