If you're looking for an easy way to invest in crypto, a cryptocurrency exchange-traded fund (ETF) could be the solution. The Securities and Exchange Commission (SEC) started approving Bitcoin (CRYPTO:BTC) and Ethereum (CRYPTO:ETH) ETFs in 2024, allowing you to invest in the two largest cryptocurrencies.
There are also crypto ETFs that get you exposure to multiple cryptocurrencies, the underlying blockchain technology they're built on, or companies with ties to the crypto space. Although this is a volatile market, investing in crypto ETFs can help you build a diverse portfolio of digital assets. That gives you a better chance of finding successful investments.
7 top crypto ETFs
7 top cryptocurrency ETFs
| ETF | Assets Under Management | Description |
|---|---|---|
| Fidelity Wise Origin Bitcoin Trust (NYSEMKT:FBTC) | $11.9 billion | An ETF that seeks to track the performance of Bitcoin |
| iShares Ethereum Trust ETF (NASDAQ:ETHA) | $594.9 million | An ETF that seeks to track the performance of Ethereum |
| Amplify Transformational Data Sharing ETF (NYSEMKT:BLOK) | $632.9 million | An ETF focused on companies involved with crypto or that offer indirect crypto price exposure |
| First Trust Indxx Innovative Transaction & Process ETF (NASDAQ:LEGR) | $96.2 million | A diversified fund containing crypto, tech, banking, and international stocks |
| Siren Nasdaq NexGen Economy ETF (NASDAQ:BLCN) | $60.8 million | An ETF investing in companies developing and using blockchain technology |
| Global X Blockchain & Bitcoin Strategy ETF (NASDAQ:BITS) | $21.7 million | An ETF half-invested in the affiliated Global X Blockchain ETF, supplemented with Bitcoin futures |
| Bitwise 10 Crypto Index Fund (OTC:BITW) | $857.0 million | A means of easily investing in the top 10 largest cryptocurrencies |
Investing in them
Investing in cryptocurrency ETFs
There are several types of cryptocurrency ETFs available. The largest are Bitcoin ETFs, which invest solely in Bitcoin. They're followed by Ethereum ETFs, which invest solely in Ethereum. One notable benefit of these ETFs is that you could invest in them through a Roth IRA for tax-free withdrawals in retirement.
You can also find ETFs that invest in multiple cryptocurrencies, crypto-related companies, or crypto futures contracts. Note that futures, in general, and especially crypto futures, carry much more risk.
Crypto ETFs
What is a cryptocurrency ETF?
An ETF is an investment fund that can be bought just like a stock. Investing in one is a quick and easy way to build a diversified portfolio since most ETFs invest in a group of stocks, bonds, and/or other assets -- in this case, cryptocurrencies and the companies involved in their development. That's not always the case with crypto ETFs, though, since the largest invest only in Bitcoin or Ethereum.
Here's a list of seven cryptocurrency ETFs to consider for 2024:
1. Fidelity Wise Origin Bitcoin Trust
The Fidelity Wise Origin Bitcoin Trust was one of the 11 Bitcoin ETFs launched in January 2024 after SEC approval. It's currently the third-largest Bitcoin fund in terms of assets.
Fidelity is one of the most trusted brokers and is notable for having self-custody of its Bitcoin. Many companies that offer Bitcoin ETFs use other crypto brokers, typically Coinbase Global (COIN 6.32%), for custody. Some investors prefer going with Fidelity for that reason. This Bitcoin ETF has an expense ratio of 0.25%. On a $1,000 investment, that would mean $2.50 in annual fees.
Expense Ratio
2. iShares Ethereum Trust ETF
If you want to invest in the second-largest cryptocurrency, the iShares Ethereum Trust ETF is a good choice. It was part of the first group of Ethereum ETFs approved by the SEC. It's 100% invested in Ethereum and has more than $590 million in assets under management (AUM).
The iShares Ethereum Trust ETF has a 0.25% expense ratio, which is in line with what similar funds charge. However, the fee is reduced to 0.12% for the first $2.5 billion in fund assets. The fee reduction lasts for the 12-month period starting on July 23, 2024.
3. Amplify Transformational Data Sharing ETF
The Amplify Transformational Data Sharing ETF doesn't directly invest in cryptocurrencies. Instead, it invests in companies involved in blockchain technology. It could be a smart pick if you're looking for the best crypto industry ETFs.
It contains more than 50 company stocks. Top holdings in the fund include:
- Core Scientific (CORZ -1.69%)
- Galaxy Digital (BRPHF 1.98%)
- MicroStrategy (MSTR 11.61%)
- Coinbase Global
- PayPal (PYPL 2.2%)
The Amplify Transformational Data Sharing ETF was launched in January 2018, making it one of the longest-tenured ETFs on this list. It has a 0.76% annual expense ratio, meaning a deduction of $7.60 in annual fees for a $1,000 investment.
4. First Trust Indxx Innovative Transaction & Process ETF
The First Trust Indxx Innovative Transaction & Process ETF is another broad bet on crypto. The fund contains more than 100 stocks, making it the most diversified crypto ETF listed here.
First Trust is also a large and well-established company that has created all sorts of investment products, which might check the box for some investors worried about track record and fund manager reputation. The First Trust Indxx Innovative Transaction & Process ETF has an annual expense ratio of 0.65%, making it one of the more affordable options on the market.
The fact that this ETF is more diversified has its pros and cons. It provides sweeping exposure to the crypto space, including many international tech companies that might be harder to come by for U.S.-based investors (Chinese companies comprise 12% of the portfolio).
It's also less volatile than many of its crypto-fund peers. That means its value normally doesn't increase as much as the values of other funds when the crypto market is doing well, but it also doesn't lose as much value during bear markets.
5. Siren Nasdaq NexGen Economy ETF
The Siren Nasdaq NexGen Economy ETF focuses on companies developing and using blockchain technology. Its AUM is far smaller than Amplify's similar ETF product, but it does provide a slightly different take on this space.
It's composed of more than 50 stocks. These include some general technology businesses with crypto or blockchain ties, such as Nvidia (NVDA 3.43%), which is a top holding.
It also includes shares of traditional lenders and digital payments networks, such as Block (SQ -0.24%) and Visa (V -0.59%), that have started dabbling in the world of crypto. It's a far more diversified means of betting on the growth of the crypto industry. It has an expense ratio of 0.68%.
6. Global X Blockchain & Bitcoin Strategy ETF
Launched in November 2021, the Global X Blockchain & Bitcoin Strategy ETF takes a two-pronged approach. Almost half of its holdings are in the Global X Blockchain ETF (BKCH 3.55%), which invests in tech companies and crypto mining stocks.
The other half is invested in Bitcoin futures. Bitcoin futures mimic the daily moves in the value of an asset, in this case, Bitcoin. However, because the futures contracts need to be rolled over monthly, they will likely underperform Bitcoin's price moves over the long term.
Other funds that invest in Bitcoin futures have experienced this problem in recent years. However, if you want some extra indirect Bitcoin investment in the mix, Global X's recent ETF launch might be what you're looking for. The annual expense ratio for this ETF is 0.65%.
7. Bitwise 10 Crypto Index Fund
The Bitwise 10 Crypto Index Fund is a unique offering on this list. It was originally a private placement fund, but shares can now be bought and sold over the counter. The fund is actively managed, so it has a hefty expense ratio of 2.5%, or $25 in annualized fees deducted from fund performance per $1,000 invested.
The Bitwise 10 Crypto Index Fund invests in the top 10 cryptocurrencies (as measured by market cap) and is rebalanced monthly to account for changes in crypto prices. Bitcoin and Ethereum are far and away the largest cryptocurrencies by size, so they make up more than 90% of the underlying portfolio. Other holdings include:
- Solana (CRYPTO:SOL)
- Cardano (CRYPTO:ADA)
- Avalanche (AVAX 0.61%)
Because this fund trades over the counter, it can sometimes trade at a severe discount or premium to the underlying crypto prices it owns, depending on the demand for shares. Investors should tread cautiously. However, if you want to invest in the largest cryptocurrencies, this fund is worth a look.
Related cryptocurrency topics
Cryptocurrency ETFs will be a volatile investment
Cryptocurrencies are still a very new asset class, and ETFs focused on them are even younger. As with any emerging asset class, expect lots of volatility -- both in cryptos themselves and in the companies focused on their development. If you want more stability, consider long-term ETFs in other assets, such as stocks or real estate.
If you decide to invest, bear two important points in mind. Keep any bet small, and stay focused on the long-term potential for cryptocurrency and blockchain technology overall.
