7 Best Cryptocurrency ETFs to Buy

Highlights Oct.22,2022 01:50

These crypto ETFs are worth a look.

Grayscale recently launched a lawsuit against the U.S. Securities and Exchange Commission. The reason? The regulator's refusal to convert Grayscale's flagship fund, the Grayscale Bitcoin Trust (ticker:, to an open-ended GBTC is currently a closed-end fund, meaning that it can sometimes trade at a premium or discount to its net asset value, or NAV. This is generally undesirable for Conversely, open-ended ETFs avoid this problem. So hopes for a U.S.-listed spotETF have so far been dashed. Still, there are a variety of ETFs that U.S. investors can use to gain crypto exposure in a regular without the need for a exchange or self-custody. Here are the seven best cryptocurrency ETFs to buy in 2022.

ProShares Bitcoin Strategy ETF

The cryptocurrency market has a substantial secondary market. Traders often use derivatives like to speculate or hedge risk. A great example here is BITO, which uses Bitcoin futures contracts to mimic the spot price of Bitcoin. Futures contracts don't always track the spot price accurately, with the difference expressed as a "tracking error." Nonetheless, BITO has done a great job of tracking Bitcoin's price since its inception. BITO is down 56.7% year to date, nearly matching Bitcoin's 56.1% fall. The difference is likely due to BITO's fees. BITO has an expense ratio of 0.95%, or around $95 in annual fees for a $10,000 investment.

Grayscale Bitcoin Trust

As noted earlier, GBTC is not technically an ETF. However, the fund trades on exchanges and can be easily purchased via most brokerages. The fund does track the spot price of Bitcoin, meaning that it holds actual cryptocurrency in offline wallets with a custodian, called "cold storage." Currently, the ETF has $12 billion in assets under management, or AUM. Each share of GBTC corresponds to around 0.00091748 Bitcoin as of a recent check. However, the closed-ended structure of GBTC can cause its market price to trade at a premium or discount to its net asset value, depending on how demand trends. Currently, the fund is trading at a 36% discount to NAV due to various large-scale in the preceding months. Investors should be aware of this and check closely before investing. GBTC also costs a rather high expense ratio of 2%.

Global X Blockchain ETF

Global X is a well-known provider of One of its most interesting funds tracks 24 themed companies involved in the mining, development, promotion and advancement of cryptocurrency . Notable holdings include Riot Blockchain Inc. and Coinbase Global Inc. While not a pure-play cryptocurrency ETF, BKCH offers good proxy exposure. Currently, the ETF has a 0.9 correlation with the price of Bitcoin. Investing in BKCH to gain exposure to cryptocurrency is akin to investing in a gold miner ETF to gain exposure to gold stocks. Because BKCH is still comprised of stocks, it tends to also have a higher correlation with the The ETF costs an expense ratio of 0.5%.

Global X Blockchain & Bitcoin Strategy ETF

Global X's other cryptocurrency ETF, BITS, holds BKCH as 50% of its underlying holdings. Then, the ETF puts its remaining 50% in cash collateral for a variety of Bitcoin futures contracts, similar to what BITO does. Thus, BITS offers investors a hybrid approach to cryptocurrency exposure, holding equal weights of and Bitcoin derivatives. Investors not comfortable holding a pure derivatives-based ETF like BITO might like BITS for its equity allocation. Conversely, investors desiring more accurate tracking of the Bitcoin spot price might like BITS for its futures allocation. The ETF costs an expense ratio of 0.65%.

Purpose Bitcoin ETF (BTCC.U)

The U.S. ETF market usually leads the way in innovation, but for cryptocurrency ETFs the Canadian market has pulled ahead. Securities regulators in Canada have approved spot cryptocurrency ETFs since February 2021, with BTCC.U listing first on the Toronto Stock Exchange. U.S. investors who can access Canadian ETFs on their brokerage platform can buy BTCC.U without exchange currency, as the ".U" version is denominated in U.S. dollars. This is likely the only way U.S. investors can gain spot cryptocurrency exposure via an open-ended ETF for the time being. Currently, BTCC.U holds 0.00018565 Bitcoin per share and costs an expense ratio of 1.49%.

CI Galaxy Ethereum ETF (ETHX.U)

Cryptocurrency ETFs don't just have to track Bitcoin. While smaller might be inaccessible for the time being, the second-largest cryptocurrency by market cap, , is also an option. The Ethereum token is heavily used in applications, notably in smart contracts, NFTs, liquidity pools and staking. Thanks to Canadian ETFs, investors can access Ethereum in physically backed spot form via ETHX.U. Like BTCC.U, ETHX.U comes in a U.S.-dollar-denominated ".U" version to save U.S. investors the need for currency conversion costs. Right now, each share of ETHX.U corresponds to around 0.003648 Ethereum. The ETF charges an expense ratio of 0.74%.

Purpose Bitcoin Yield ETF (BTCY.U)

Bitcoin is highly with intraday or overnight swings of 10% or more not uncommon. A great way to harvest this volatility and convert it into is via a ETF like BTCY.U. BTCY.U holds a portfolio of Bitcoin, and then sells an called a covered call on its holdings. For this, the ETF receives a premium, which is converted into income for the ETF. The higher the volatility, the greater this income. Currently, BTCY.U yields 16.1%. The downside is that during the covered call can get exercised if the price of Bitcoin soars sharply above its strike price, which caps the gains for BTCY.U. Essentially, the fund sells its future upside potential for present income, which can be desirable for investors. The ETF costs an expense ratio of 1.28%.

7 of the best cryptocurrency ETFs to buy: