ETFs (exchange-traded funds) are typically the top choice of many investors as they offer highly diversified exposure to the stock market. Crypto ETFs do the same for the world of cryptocurrencies.
In this article, we wanted to explain what a crypto ETF is, how this type of investment security works, and what the leading ETFs for cryptocurrencies are. Check our list for a glance at the best blockchain ETFs, but read the detailed reviews to find the one that suits your needs the most.
Best Performing Blockchain ETFs Reviewed
Now that you’ve seen a quick intro to our top crypto ETFs, it’s time to dig deeper into each one. We’ll explore which assets they cover and present their price charts and goals. This information will help you choose the one most suits your needs.
You won’t find a Vanguard crypto ETF or an Ally crypto ETF on our list, as these companies either don’t have crypto ETFs (Vanguard) or don’t have ones that offer enough benefits and high-enough returns (Ally).
Bear in mind that every crypto ETF is a serious investment, requiring you to put in a sizable amount to get adequate returns. And since the cryptocurrency space is inherently highly volatile, it’s crucial to analyze the ETF thoroughly before buying in, just as you would cryptocurrencies with the most growth potential.
You can always start with smaller investments by considering cryptocurrency ETF stock alternatives, like the number one pick on our list.
1. Crypto Presales — Best Crypto ETF Alternatives With Higher Potential Yields
Our number one pick is not a crypto ETF but a crypto presale. More specifically, the Bitcoin ETF Token.
But what are crypto presales, and what makes them the best alternative if you’re looking to invest in crypto ETFs?
Cryptocurrency presales are early sales of novel coins and tokens from projects yet to begin their journey in the niche. Many crypto project founders offer their tokens in a presale to raise funds for further development, garner attention to the project, and more.
What’s beneficial to you and other potential investors is that these presales offer tokens at a discount. So, you’re likely to make a profit by the time the project launches and the tokens become available for free trading on exchanges.
The best crypto presales, like the Bitcoin ETF Token, which we’ll cover below, make their presales last for a few months, and separate them in stages. Each stage raises the token’s price by a small amount, eventually reaching a much higher valuation on the launch date. In many cases, if you join in the first stage, you’re set to get a fixed profit of around 30%.
No crypto ETF can offer such yields, at least not fixed. They often provide decent gains over a longer period, but a crypto presale is undoubtedly better if you’re up for taking some risk. Plus, you don’t have to spend as much as on an ETF and you get to earn more tokens by staking them.
Once the presale phase ends and the token launches, you can sell your assets, or better yet, keep most of them and wait for the value to rise even further. Many investors have made a fortune doing this, like this Pepecoin trader who made millions from a $263 investment.
Naturally, you can never be sure this will pan out for you, as many cryptos go bust relatively early. It’s thus essential to pick tokens that have better chances of going to the moon. You need to choose projects that have exciting and unique functions that solve problems no other blockchain initiatives have tackled in the past.
We are confident that Bitcoin ETF Token is one such token.
Bitcoin ETF Token ($BTCETF) — Latest Presale Crypto With Generous Staking Yields Of Over 10,000% In The Early Phase
Bitcoin ETF Token is a brand new ERC20 token presale, meaning it works on the Ethereum blockchain, designed to reward holders based on market events that surround the Bitcoin spot ETF approval. It also offers a massive staking APY of over 10,000% during the early stages of the presale. This means you get to earn more tokens as a reward for locking them up for a certain period of time.
Buy $BTCETF tokens in the presale by connecting your Ethereum-based crypto wallet like MetaMask. You need ETH, USDT or a card to make the purchase.
Similar to other presales, the Bitcoin ETF Token comes with 10 presale stages. Every stage offers 84 million tokens with a price that gradually increases with each stage. That’s why the highest rewards go to those who buy during the early stages.
For example, in the first presale stage of $BTCETF, you can buy tokens at a price of $0.0050. In the final stage, the token price goes to $0.0068. That’s a 36% increase from first to last stage. Moreover, when tokens launch on an exchange, they typically list at a higher price than the presale price, thus increasing potential rewards.
Regardless of which presale stage you decide to join, the generous staking APY of over 10,000% can help you maximize your gains. This won’t last, though. As more people buy and stake their tokens, the APY will drop, which is why getting in early could be the most lucrative option.
The maximum supply of the $BTCETF tokens is 2.1 billion. Of those, 840 million are dedicated for the token presale, 525 million for the staking rewards and 210 million for the liquidity pools.
The remaining 525 million tokens are going to be burned as each milestone is reached around the Bitcoin spot ETF approval.
Token burn mechanics lower the supply, which is likely to positively affects the token price. The token burn starts with a 5% burn tax on every transaction. This will drop to 0% as each milestone is reached. Every milestone will result with the burning of 5% of the total supply. This includes events, such as:
- $BTCETF token reaches $100 million trading volume.
- The first Bitcoin ETF is approved.
- The first Bitcoin ETF is launched.
- The total assets under management for all Bitcoin ETFs reaches $1 billion in value.
- Bitcoin reaches a price of over $100,000.
ProShares Bitcoin Strategy ETF, listed under the ticker BITO, is the first crypto ETF on the market. It began in late 2021, and it’s still going strong, as you can see from the 50% rise since the start of the year. It’s also the first ETF of its kind to get US approval.
The fund tracks the price of Bitcoin futures contracts, so you’re effectively investing in the price of BTC, not the coin itself. This offers direct exposure to Bitcoin, making it ideal for investors looking to get that without buying BTC. The fund is not backed by actual crypto, so the price of futures contracts it follows will sometimes be slightly different from the actual price of Bitcoin.
However, despite that, this old cryptocurrency ETF stock has been quite effective at keeping this disparity to a minimum, which is already better than the majority of crypto ETFs out there.
BITO trades on the New York Stock Exchange, so you’ll have an easy time joining in on the action. The expense ratio is 0.95%, and there are no other fees you need to worry about.
3. Fidelity Advantage Bitcoin ETF (FBTC) — Easy Crypto ETF for Bitcoin Investors
This Fidelity crypto ETF is the top choice for Bitcoin investors looking for an easy entry to the cryptocurrency ETF market. You can easily trade, buy, and sell the FBTC with a traditional brokerage account.
The fund is old, and it entered the Toronto Stock Exchange in late 2021, soon after BITO started the industry. The ETF is part of the extensive Fidelity network, but it’s handled by the Canadian branch of the company, which is why its price is shown in Canadian dollars.
The best part about this Fidelity cryptocurrency ETF is that its assets are almost 100% backed by actual Bitcoin, so you’re effectively investing in BTC, not its price, as many other Bitcoin ETFs allow. The assets are stored in cold wallets, so you don’t have to worry about their security.
The management fee is quite low, set at 0.40%, but there is also an expense ratio of 0.95%. This Fidelity cryptocurrency ETF controls a sizable amount of assets, as its net value is $58.3 million. There are still much larger crypto ETFs, but most deal with blockchain and crypto companies, not the coins themselves, making them more attuned to traditional ETF investors looking to diversify their portfolios.
4. ARK Fintech Innovation ETF (ARKF) — Crypto Index ETF for Fintech Investors
If you’re looking to invest in fintech companies, you don’t need to look further than this Ark crypto ETF, which tracks a wide range of companies aiming for long-term growth in the financial technology sector. It’s been doing so since early February 2019, when the fund was established.
Some of the ETF’s biggest holdings are Shopify, Coinbase, Block, DraftKings, and Robinhood. These are highly successful companies, especially as of late, which explains the roughly 33% year-to-date rise in this ETF’s Net Asset Value (NAV). It’s one of the main reasons we wanted to add ARKF to our cryptocurrency ETF list.
The companies this ETF deals with usually rely on blockchain technology, and with such high gains, it’s clear that this is one of the best blockchain ETFs on the market. You’ll also find various other fintech businesses among this ETF’s holdings, usually between 35 and 55.
The fund’s fees are low, and you only have to worry about the management fee of 0.75%. The primary exchange where you can trade this ETF is the NYSE Arca.
5. Bitwise Crypto Industry Innovators ETF (BITQ) — Cryptocurrency ETF for Passive Investing
The Bitwise Crypto Industry Innovators is a relatively new crypto ETF ideal for passive investors. The whole fund is managed passively. It follows the Bitwise Crypto Innovators 30 index, which includes 30 stocks from companies in the crypto sphere, primarily those dealing with financial services and crypto mining.
What’s more, it deals only with the stocks of companies with 75% of their net assets in crypto, mainly Bitcoin, or those that generate 75% of their revenue from crypto. This ensures the ETF maintains holdings in digital currencies.
The fund started in 2021 during the massive crypto boom, which is why the all-time NAV change is negative, around -73.11%. However, the year-to-date change is highly positive, almost 85%, making it one of the best-performing crypto ETFs at the moment.
The net assets of this ETF are higher than $67 million, with as many as 27 holdings in it, most notably Galaxy Digital, Microstrategy, Coinbase, and Northern Data. The expense ratio is 0.85%.
6. Valkyrie Bitcoin Miners ETF (WGMI) — Crypto ETF With Investments in Bitcoin Mining Companies
The WGMI blockchain ETF is ideal for all investors interested in putting their assets into crypto mining companies. That’s because it’s an actively managed fund with holdings primarily being companies that generate 50% of their revenues from Bitcoin mining. At least 80% of the total holdings must be companies in the Bitcoin mining sector.
Despite that, the Bitcoin ETF doesn’t keep actual bitcoin, and investors get indirect BTC exposure through futures contracts.
The fund is relatively small compared to most others on the list, as its total net assets are around $9.5 million. However, it’s still one of the best cryptocurrency ETFs as of late, with the year-to-date NAV change being around 122% at the time of writing.
The biggest holdings, each representing approximately 10% of the total net assets, are stocks in Marathon Digital Holdings, Riot Platforms, and Hut 8 Mining.
It’s also a brand new crypto ETF, as it was established in July 2022, so the massive gains in the first two-quarters of 2023 show that it’s a worthy investment, despite the poor performance in 2022. The total expense ratio is 0.75%.
7. First Trust Indxx Innovative Transaction & Process ETF (LEGR) — Most Diversified Blockchain ETF
Our cryptocurrency ETF list ends with one of the most diversified options, the First Trust Indxx Innovative Transaction & Process ETF, which carries the ticker LEGR.
The fund keeps more than 100 stocks, which is a high number for this type of ETF. It offers highly diversified exposure to the crypto space, including companies not typically available to US investors.
This cryptocurrency funds ETF tracks companies that are somehow connected to blockchain technology. These are primarily exchange-listed businesses investing in, owning, or developing products and services that benefit from blockchain technology.
The ten biggest holdings only amount to around 14% of the total amount, further displaying the portfolio’s diversity. Among the top ten are massively successful businesses like Intel, Nvidia, Alibaba, Baidu, Microsoft, Amazon, Samsung, and Salesforce.
Thanks to this high diversity, it’s one of the few crypto ETFs with a very positive all-time NAV change. It’s around 47%, but the year-to-date NAV change is only 3%. The index has been on the market since April 2018.
It’s worth noting that this is one of the cheapest funds in the crypto space, as the total expense ratio is only 0.65%.
What Is a Cryptocurrency ETF?
Cryptocurrency ETFs offer investors a way to invest in more than one coin and typically follow the best cryptocurrency investment currently on the market.
A crypto ETF is a type of ETF, but instead of following an index or collection of other assets like stocks, it tracks crypto prices. Some crypto ETF funds track a single coin, usually Bitcoin or Ethereum, while others track several established ones.
Being ETFs, they offer a whole host of benefits, including diversification, low ownership costs, and investment security. However, the most significant advantage is that investors are not required to do their own research and re-investing, as that part is outsourced to the analysts compiling and maintaining the ETFs.
To understand this better, you also need to learn more about exchange-traded funds (ETFs) in general. In short, an ETF is a pooled investment security that tracks a particular sector, index, commodity, or some other type of asset.
The important part is that an ETF is a basket of many securities, allowing investors to put their money into various assets, consequently diversifying their portfolios and lowering risk. You can buy or sell an ETF on the stock exchange just like a stock.
ETFs have been on the market since the 1990s, while the first crypto ETF began on October 18, 2021. That was the ProShares Bitcoin Strategy ETF (BITO) still trading and offering exposure to BTC futures contracts.
How Do Crypto ETF Funds Work?
To understand how a crypto ETF stock security works, you need to learn about the three types of cryptocurrency ETFs:
- Direct ownership — This type of ETF for crypto offers direct exposure to cryptocurrencies as it’s backed by actual coins. The ETF management company buys real cryptos listed in the ETF. They are represented as shares. An investor buying the share becomes an indirect owner of the crypto without having to worry about actually buying them.
- Crypto derivatives — This type of crypto ETF stock is a cryptocurrency derivative where the investor doesn’t own the underlying crypto assets. These ETFs work like crypto exchange-traded products (ETPs) or futures contracts. In essence, this form of crypto ETF follows the price of crypto assets, effectively mimicking their movement.
- Crypto-related stocks — The last type, arguably one of the most lucrative, are crypto ETFs that have nothing to do with cryptocurrencies themselves but companies in the crypto or blockchain technology spheres. These ETFs are much like all others as their holdings are stocks in companies — it’s just that these businesses are, in one way or another, part of the crypto space. Most ETFs on our list belong to this category.
Whether you’re investing directly or through derivatives, the point is that someone else manages the fund while you only buy shares in it and benefit when the prices go up. Naturally, if the underlying cryptocurrencies’ prices decrease, your investment’s value will also drop.
This also means that every investor must pick a reputable and trustworthy crypto ETF whose management team is transparent. You will have to pay the underlying fees of the ETF, but there are no added expenses attached to physical crypto ownership, like custody charges and transaction and network fees.
In other words, buying shares in an ETF with cryptos is less costly than buying the coins outright, as long as they are of a higher value, like BTC and ETH. Directly buying cryptos under $1 is still easier than investing in ETFs for cryptocurrency.
What Coins Do Crypto ETFs Track?
Most ETFs in the world of cryptocurrency track crypto or blockchain companies, including most of the ones we recommend. In other words, they don’t buy actual coins but track their prices.
However, there are still plenty of Bitcoin ETFs and funds with other cryptocurrencies. ProShares Bitcoin Strategy ETF (BITO), which you’ll find recommended here, follows Bitcoin.
Others allow you to invest in several coins at once, usually the biggest cryptos in the world, like Ethereum, Cardano, Polkadot, Binance Coin, and Solana.
For instance, Bitwise 10 Index Fund (BITW) tracks the prices of the top ten cryptos by market cap.
Why Invest in a Crypto ETF?
Let’s cover the most important reasons for investing in ETFs for cryptocurrency.
To Diversify Your Portfolio
One expected benefit of investing in an ETF is exposure to various cryptocurrencies or crypto companies. The best ETFs in the sphere, like the ones recommended in this guide, track several dozen assets, and by investing in the fund, you’re investing in all of them.
For instance, the First Trust Indxx Innovative Transaction & Process ETF (LEGR) tracks 100 companies. By investing in it, you’ll get stocks in all of these.
To Avoid Buying Crypto Directly
If you want to invest in popular cryptos like Bitcoin and Ethereum but don’t need the hassle of creating wallets, registering and trading on crypto exchanges, and paying various transaction fees, the best crypto ETF on the market is the right alternative.
Investing in such an ETF offers exposure to cryptocurrencies but doesn’t involve the risk and hassle inherent in buying and owning them.
Besides the need for researching and finding the right cryptocurrency funds ETF for you, there’s nothing else you need to worry about after investing. Naturally, you can add more money to the fund over time, but otherwise, this form of investing is entirely passive.
The ETFs are actively managed by professionals, for which you pay a small fee percentage, and you no longer have to worry about your investment. The management team is constantly looking for investment opportunities to keep the index rising in value, thus increasing the value of your investment, making this the ideal method for passive investors.
Crypto ETFs Can Be Traded
Another great advantage of blockchain ETFs is that you get to trade them like stocks.
You can manage risk by investing in ETFs that track derivatives instead of actual cryptos. You can short-sell your ETFs to profit when the prices drop. You can even buy these ETFs on a margin by getting funds from a broker.
Crypto ETFs vs. Crypto Presales
We’ve already discussed cryptocurrency ETFs and crypto presales in detail, but it’s time to summarize these points. To simplify things, let’s take a look at the pros and cons of both:
Typically very stable
Unstable and risky
Low but relatively stable returns
Quicker and often much higher returns
Ideal for passive investors
Perfect for risk-takers
No need for direct oversight
No coin ownership
You own the coins after the presale
Transaction fees only
Great for diversification
You need to buy different coins to diversify
Asset price is not accurate
Crypto ETF vs. Stock ETF
A regular stock ETF allows investors to pool their funds and invest in a predetermined set or basket of securities, usually stocks in companies from specific sectors. Some ETFs can be highly specialized to a particular niche, while others are broader and focus on high-performing companies in various industries.
A management team handles the day-to-day business of trading stocks on an organized market with the pooled assets from the fund, while investors can sit and relax. Naturally, this service involves a management fee, but it’s always relatively small compared to the security of a good ETF and the profits shared with everyone involved.
An investor can quickly check the value of their investment by checking the ETFs ticker and seeing the current trading price.
ETFs for cryptocurrency are effectively the same, with the main difference revolving around the contents of the basket of securities. These holdings usually include various blockchain, crypto, and crypto mining companies. In other cases, they contain specific cryptos, like a Bitcoin ETF, allowing you to invest in the price of coins without actually buying them.
Whatever the case, the point is that you still get the same benefits of stock ETFs while investing in companies and currencies in the cryptocurrency sphere.
There are plenty of crypto ETFs on the market, many of which can be risky. The ones we recommend offer high returns and are generally considered more stable, especially the ones dealing with companies in the crypto space.
However, none provide direct ownership of cryptocurrencies. If that’s what you’re looking for, crypto presales like Bitcoin ETF Token are a better alternative. You get to buy tokens directly and can potentially make a fortune with the right projects.
If you want to join in on the action, consider buying $BTCETF tokens in the early stages of a presale.