ETFs (Exchange Traded Funds) are financial instruments that track the progress of any asset or index fund. These are most suitable for passive traders and investors who don’t have time to monitor the price of cryptocurrencies regularly. Many investors get confused between ETFs and Mutual Funds but there is a difference between them as unlike mutual funds ETFs can be traded like other cryptocurrencies, and eventually, they outperform mutual funds, in the long run, making them attractive investments options in the traditional market.
The company that issues and lists the cryptocurrency ETF on the stock exchange needs to first bear custody of the digital coin. After that interested investors buy the shares of the company to get their rights on the ETF. This also makes the investor indirectly prone to the volatility of the cryptocurrency. Though, still it makes it less risky to invest in cryptocurrency.
Best Cryptocurrency ETF
We have prepared a list of the best cryptocurrency ETFs that are available in the market.
Amplify Transformational Data Sharing ETF
One of the first ETFs was started in 2018 after the bull run. This ETF is a bit different than the traditional ETFs, as it doesn’t track any index but has holding in several companies that are directly involved in blockchain technology regularly, Hive Blockchain and others.
The expense ratio of Amplify stands at 0.7% with assets under management (AUM) of $365 million. The 52-week low and 52-week high stand at $16.41 and $62.94 respectively. Amplify Transformational Data Sharing ETF has high liquidity.
Capital Link NextGen Protocol ETF
It was opened to trade in 2018. Unlike Amplify Transformational Data Sharing ETF it does track the Innovation Labs Blockchain Innovators Index along with it, it has holdings in other 45 companies with some of them being IT giants like Microsoft Corporation, VISA, and NVIDIA.
The expense ratio of Capital Link stands at 0.95% with assets under management of $20.6 million. The 52-week low and 52-week high stand at $24.91 and $42.53 respectively. The liquidity isn’t that high.
Reality Shares Nasdaq NexGen Economy ETF
It was available to be traded in 2018. It tracks the index of Reality Shares Nasdaq Blockchain Economy along with it has holdings in around 73 companies like Galaxy Digital Holdings Limited, Micron Technologies, and Baidu.
The expense ratio of Reality Shares Nasdaq NexGen Economy ETF stands at 0.68% with assets under management of $188 million. The 52-week low and 52-week high stand at $22.35 and $53.27 respectively. This ETF has high liquidity.
First Trust Indxx Innovative Transaction & Process ETF
It has been listed on the stock exchange since 2018. It follows the Indxx Blockchain Index and it has holdings in other 100 companies including Baidu Inc., Micron Technologies, and Advanced Micro Devices.
The expense ratio of First Trust Indxx Innovative Transaction & Process ETF stands at 0.65% with assets under management of $54.4 million. The 52-week low and 52-week high stand at $18.28 and $26.31 respectively. This ETF has low liquidity.
If you are a serious investor then you need to know about the best cryptocurrency ETF. As stated earlier it could be one of the best options for investors to diversify their portfolio into cryptocurrency as well as stocks. For investors worried about regulations, it provides trading in a regulated format. They are less vulnerable to hacking and theft making them more safe and secure.