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6 Best Crypto ETF to Invest in 2022

Published
November 9, 2022
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    An ETF, short for exchange-traded fund, is a pool of investment securities that represent a certain commodity, sector, or even asset. They are very similar to mutual funds, but the only difference is that ETFs can be either purchased or sold through a brokerage company.

    But how are ETFs different from other investment assets? And which are the best crypto ETFs that you can invest in? Let’s find out the answers to all these questions in this blog.

    Blockchain ETFs

    Blockchain ETF portfolios only contain the stocks of regulated companies, which include numerous sizable blue-chip technology companies that have adopted or are in the process of adopting blockchain technology. Compared to Bitcoin ETFs or cryptocurrency ETFs, which are more tightly focused on following the price of particular cryptocurrencies, they generally invest in a larger range of assets.

    As mentioned earlier, ETFs can be of various types:

    1. Index ETFs

    2. Foreign market ETFs

    3. Commodity ETFs

    4. Sector or industry ETFs, and so on. 

    But these ETFs invest in thousands of businesses. They fall under the following general categories:

    1. Bitcoin-owning firms such as Tesla and MicroStrategy
    2. Blockchain-based tech companies such as Advanced Micro Devices, VMware, and Galaxy Digital Holdings
    3. Financial services companies such as BNP Paribas, HSBC, and NVIDIA Corp
    4. Crypto miners such as Marathon Digital and cryptocurrency exchanges such as Coinbase

    But now the real question is: why should you invest in ETFs and how is it different from investing in cryptocurrencies and stocks?

    Investing in the Best Crypto ETF

    Cryptocurrencies have made big headlines recently for their massive profits and terrible losses. But blockchain, which enabled the cryptocurrency system, received far less attention than cryptocurrencies.

    So, while smaller, more specialized businesses have made blockchain and cryptocurrencies the center of their operations, larger, more established public organizations have dabbled in the field. In either event, there hasn't yet been a "killer app" that solidifies blockchain's position as a cornerstone of the commercial and technological future.

    This implies it's exceedingly risky to invest in the stocks of just one or a few blockchain- or cryptocurrency-focused businesses. As a result, picking a diverse blockchain ETF is a less dangerous method to gain exposure to the sector. In simpler words, this is similar to the concept of how investing in stocks is a more risky investment alternative than investing in mutual funds.

    So, now the next question is which is the best crypto ETF to consider?

    Best Crypto ETF of 2022

    1. Siren Nasdaq NexGen Economy ETF (BLCN)
    2. Bitwise Crypto Industry Innovators ETF (BITQ)
    3. Amplify Transformational Data Sharing ETF (BLOK)
    4. Global X Blockchain ETF (BKCH)
    5. First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT)
    6. Fidelity Crypto Industry and Digital Payments ETF (FDIG)

    Let us take a look at each of these best crypto ETFs.

    1. Siren Nasdaq NexGen Economy ETF (BLCN)

    Launched in January 2018, The Siren Nasdaq NexGen Economy ETF is another fund that specializes in businesses that are involved in the development and application of blockchain technology.

    BLCN provides a diverse portfolio of companies with 63 equities, and none of its top 10 holdings represents more than 4% of its net assets.

    1. Expense ratio: 0.68%

    2. Assets under management: $104 million

    3. Three-Month Average Daily Volume: 34,386

    4. Inception Date: 2018-01-16

    1. Bitwise Crypto Industry Innovators ETF (BITQ)

    Launched in the second quarter of 2021, Bitwise Crypto Industry Innovators ETF consists of 30 stocks. These stocks focus on early adopters of cryptocurrencies and innovators, and either has 75% of their net holdings in Bitcoin or another crypto asset, or at least 75% of their revenue comes from cryptocurrencies.

    1. Expense ratio: 0.85%

    2. Assets Under Management: $106 million

    3. Three-Month Average Daily Volume: 118,239

    4. Inception Date: 2021-04-27

    1. Amplify Transformational Data Sharing ETF (BLOK)

    The actively managed Amplify Transformational Data Sharing ETF invests in a variety of value and growth stocks with varying market capitalizations, employing a blended strategy.

    BLOK invests a minimum of 80% of its net assets in stocks of businesses involved in the creation and application of blockchain technologies, including MicroStrategy Inc., Silvergate Capital Corp. (SI), and Overstock.com.

    1. Expense ratio: 0.71%

    2. Assets under management: $662.1 million

    3. Three-Month Average Daily Volume: 306,053

    4. Inception Date: 2018-01-16

    1. Global X Blockchain ETF (BKCH)

    A passively managed fund called the Global X Blockchain ETF (BKCH) states that blockchain technology can be used for much more than simply cryptocurrency. It makes the appropriate investments in 25 technology and Bitcoin mining companies that profit from the uptake of blockchain technology.

    It is one of the best crypto ETFs as this consists of businesses creating novel blockchain solutions, cryptocurrency exchanges (such as Coinbase Global Inc.), and mining firms (such as Marathon Digital).

    1. Expense ratio: 0.50%

    2. Assets under management: $64 million

    3. Three-Month Average Daily Volume: 179,196

    4. Inception Date: 2021-07-12

    1. First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT)

    In our list of the best crypto ETF, the fifth top crypto ETF is the First Trust SkyBridge Crypto Industry and Digital Economy ETF. CRPT presently owns 30 equities, with the top ten holdings accounting for the majority of its assets.

    Even though the fund consists of 103 stocks, financials account for little more than 37% of the portfolio, trailed by IT and consumer discretionary companies.

    1. Expense ratio: 0.85%

    2. Assets under management: $22 million

    3. Three-Month Average Daily Volume: 48,678

    4. Inception Date: 2021-09-20

    1. Fidelity Crypto Industry and Digital Payments ETF (FDIG)

    The success of international blockchain, cryptocurrency, and digital payment enterprises is tracked by this FDIG. FDIG presently owns 35 equities, with 33% of them in the sector of financial services and 63% in the tech sector. As a result, FDIG’s mission skews slightly in favor of the crypto business.

    1. Expense ratio: 0.39%

    2. Assets under management: $18 million

    3. Three-Month Average Daily Volume: 48,678

    4. Inception Date: 2022-04-19

    Summary: 6 Best Crypto ETF to Invest in 2022

    Top Crypto ETF Expense Ratio AUM Three-Month Average Daily Volume Inception Date
    Siren Nasdaq NexGen Economy ETF (BLCN) 0.68% $104 million 34,386 2018-01-16
    Bitwise Crypto Industry Innovators ETF (BITQ) 0.85% $106 million 118,239 2021-04-27
    Amplify Transformational Data Sharing ETF (BLOK) 0.71% $662.1 million 306,053 2018-01-16
    Global X Blockchain ETF (BKCH) 0.50% $64 million 179,196 2021-07-12
    First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT) 0.85% $22 million 48,678 2021-09-20
    Fidelity Crypto Industry and Digital Payments ETF (FDIG) 0.39% $18 million 48,678 2022-04-19

    Bottom Line

    Blockchain technology is still in its infancy. But considering how quickly the technology is developing, adding a blockchain ETF to your portfolio may be the best course of action for investing in it. However, there are a few things that you must keep in mind.

    If you choose to invest, keep your stakes low. Focus on the long-term prospects of cryptocurrencies and blockchain technology as a whole. And lastly, you must be aware of the tax consequences of ETFs.

    Best Crypto Etf - FAQs

    1) Which is the best crypto ETF?

    One of the top cryptocurrency ETFs is the Bitwise 10 Crypto Index Fund. It is rebalanced every month to reflect changes in cryptocurrency values and invests in the top 10 cryptocurrencies. Bitcoin and Ethereum account for 61% and 29% of the portfolio, respectively.

    2) What is the largest crypto ETF?

    ProShares Bitcoin Strategy ETF BITO, which has $643.71M in assets, is the largest cryptocurrency ETF.

    3) How many ETFs should I own?

    Specialists believe that a portfolio made up of 5–10 ETFs is the ideal amount of diversification for the majority of individual investors. The quantity of ETFs, however, is not what you should be focusing on. Since blockchain is still comparatively new, you also must consider the risks associated with it.
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