S Is A Cryptocurrency ETF Better Than Investing Directly In Bitcoin & Ethereum? A Comparison

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Is buying one of the 23 cryptocurrency/blockchain ETFs a more conservative way to participate in that sector than buying physical Bitcoin, Ethereum or some of the many alt-cryptocurrencies? This article compares the performance of each since the end of November and reveals which assets are performing best.

U.S. Cryptocurrency/Blockchain ETFs 

Below are the performances of the various ETFs since the end of November in descending order.

1. First Trust Indxx Innovative Transaction & Process ETF (LEGR): UP +1.5%

  • launched in 2018 as
  • ​​​​​​​a large-cap-heavy equity-based ETF, with a median market cap of almost $94 billion, that tracks the performance of the Indxx Blockchain Index, and has
  • a portfolio capped at 100 stocks of which 39% are in the financial sector, 32% in technology and 9% in consumer technology with the top three countries being the U.S. (34%), China (12%), and India (7%).
  • Go here for chart of most recent pricing.

2. Simplify US Equity PLUS GBTC ETF (SPBC): - 1.0%

  • launched in May, 2021,
  • ​​​​​​​invests 85-90% of its assets in equities, and
  • invests 10-15% in the Grayscale Bitcoin Trust for people who believe it's important to be invested in both the stock market and cryptocurrencies.
  • Go here for chart of most recent pricing.

3. Siren Nasdaq NexGen Economy ETF (BLCN): -5.9%

  • launched in January, 2018 as a
  • passively managed (read: index) ETF, that tracks the performance of the Nasdaq Blockchain Economy Index, and
  • has 63 global constituents with the U.S. accounting for 53% of assets, Japan for 13% and China for 13% with the top three sectors being technology (43%), financials (33%) and communications (11%).
  • Go here for chart of most recent pricing.

4. Amplify Transformational Data Sharing ETF (BLOK): -12.6% 

  • an actively managed fund which
  • invests in companies involved in developing blockchain technologies, and/or using them for their own business and in the Purpose Bitcoin ETF and the 3iQ CoinShares Bitcoin ETF, both of which directly track Bitcoin, to provide some "direct" exposure.
  • Go here for chart of most recent pricing.

5. Valkyrie Bitcoin Strategy ETF (BTF): -15.9%

  • launched in October, 2021, and
  • tracks Bitcoin futures, rather than the spot price of Bitcoin itself.
  • Go here for chart of most recent pricing.

6.  ProShares Bitcoin Strategy ETF (BITO): -16.0%

  • ​​​​​​​began trading in October 2021, and
  • makes the process of investing in Bitcoins considerably easier, safer, and more convenient for these 5 major reasons.
  • Go here for chart of most recent pricing.

7. VanEck Bitcoin Strategy ETF (XBTF): -16.0%

  • began trading in November, 2021,
  • offers investors a way to gain exposure to Bitcoin through the futures market, and
  • has a management fee of 0.65% which is markedly lower than the 0.95% fee charged by both BITO and BTF.
  • Go here for chart of most recent pricing.

8.  First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT): -17.1%

  •  launched in September, 2021, by SkyBridge Capital II LLC, an alternative investment manager founded by Anthony Scaramucci, the one-time White House communications director for Donald Trump,
  • plans to invest at least 80% of net assets in crypto industry companies (50%) and digital economy companies (50%), and
  • has 30 constituents, with the top 10 accounting for 60% of assets of which 35% are in software, 24% in capital markets and 15% in IT services (15%). 
  • Go here for chart of most recent pricing.

9.  VanEck Digital Transformation ETF (DAPP): -17.9%

  • launched in April 2021,
  • tracks the performance of the MVIS Global Digital Assets Equity Index, and
  • is a focused portfolio with just 25 holdings of which the top 10 account for 64% of total assets with 75% of the portfolio invested in technology stocks, with the U.S. at 62% of assets, followed by Canada (14%), China (13%).
  • Go here for chart of most recent pricing.

10. Global X Blockchain and Bitcoin Strategy ETF (BITS): -18.2%

  • began trading on November 16th, 2021 and
  • invests in both bitcoin futures and companies positioned to potentially benefit from advances in blockchain technology.
  • Go here for chart of most recent pricing.

11. Bitwise Crypto Industry Innovators ETF (BITQ): -19.0%

  • launched in May, 2021,
  • tracks the performance of the Bitwise Crypto Innovators 30 Index, and the top 10 stocks account for a massive 64% of assets, and
  • provides exposure to the crypto market without owning crypto assets directly, exposure to the companies building the crypto infrastructure such as Bitcoin miners, trading platforms, etc. and a piece of global cryptocurrency players such as Coinbase.
  • Go here for chart of most recent pricing.

12. Global X Blockchain ETF (BKCH): -21.4%

  • tracks the performance of the Solactive Blockchain Index,
  • divides the companies into "pure-play" stocks that derive at least 50% of revenues from blockchain activities, "pre-revenue" firms whose primary business is in blockchain technology but don't yet generate revenue and "diversified" companies that generate less than 50% of revenues from blockchain activities.
  • technology accounts for 72% of assets, followed by financials (15%) and communication services (7%) with the U.S., Canada, and China accounting for almost 92% of the portfolio.
  • Go here for chart of most recent pricing.

13. Volt Crypto Industry Revolution and Tech ETF (BTCR): -23.0%

  • was introduced in October 2021,
  • offers exposure to cryptocurrency through assets tied to the market, like miners and crypto-centric tech plays, and
  • provides a stock-to-flow (S2F) price prediction algorithm that predicts the future price of Bitcoin by measuring its scarcity of supply that it believes will help it manage its assets, increasing or decreasing exposure to different areas of the market given the coin’s scarcity.
  • Go here for chart of most recent pricing.

Canadian Cryptocurrency/Blockchain ETFs 

(Please note that the following ETFs only trade on Canadian exchanges and the ".U" in the symbol provides pricing information in U.S. dollars. If you are American and wish to buy any of the ETFs, funds or trusts listed below consider providing your broker with the security's CUSIP number (Go here to read Advice For Americans On Buying Cannabis Stocks Listed On Canadian Exchanges) to facilitate any transaction.)

Below are the performances of the various Canadian stock exchange listed ETFs since the end of November in descending order:

1. CI Galaxy Ethereum (ETHX.U): -13.3%

  • provides exposure to the daily price movements of the U.S. dollar price of Ether (ETHR.U) through an institutional-quality fund platform,
  • Go here for chart of most recent pricing.

2. Purpose Ether ETF (ETHH and ETHH.U): -13.3%

  • began trading on the TSX in April, 2021,
  • invests directly in physically settled Ether tokens, not derivatives, allowing investors easy and efficient access to the emerging Ether asset without the associated risk of self-custody within a digital wallet.
  • Go here for chart of most recent pricing.

3. The Evolve Ether ETF (ETHR and ETHR.U): -13.5%

  • launched on April 20, 2021, and
  • has a management fee of 0.75%.
  • Go here for chart of most recent pricing.

4. The 3iQ CoinShares Ether ETF (ETHQ and ETHQ.U): -13.6%

  • began trading on the Toronto Stock Exchange in April, 2021 and
  • has a management fee of 1%, 
  • Go here for chart of most recent pricing.

5. Evolve Cryptocurrencies ETF (ETC and ETC.U): -14.7%

  • began trading on the TSX in September 2021, by initially investing in Evolve Bitcoin ETF (EBIT.U) and Evolve Ether ETF (ETHR) and because of this they will pay no management fees, and
  • is a convenient way to obtain exposure to bitcoin and ether on a market capitalization basis.
  • Go here for chart of most recent pricing.

6. 3iQ Coinshare Bitcoin ETF (BTCQ and BTCQ.U): -15.6%

  • launched in April 2021, and
  • provides exposure to the daily price movements of the U.S. dollar price of bitcoin.
  • Go here for chart of most recent pricing. 

7. CI Galaxy Bitcoin ETF (BTCX.U and BTCX.B): -15.7%

  • launched in March 2021 with the lowest fee (0.4%) of any cryptocurrency ETF.
  • Go here for chart of most recent pricing.

8. Ninepoint Bitcoin ETF (BITC and BITC.U): -15.8%

  • converted from a closed-end investment fund into an ETF in May, 2021, and
  • offers carbon-neutral exposure to Bitcoin for investors attracted to environmental, social & governance investment opportunities.
  • Go here for chart of most recent pricing.

9. Evolve Bitcoin ETF (EBIT and EBIT.U): -15.8%

  • launched in February, 2021 with a management fee of $0.75% and
  • provides investors a practical way to invest directly in Bitcoin using a brokerage account.
  • Go here for chart of most recent pricing.

10. Purpose Bitcoin ETF (BTCC and BTCC.U): -22.8%

  • became the world's first physically settled ETF exchange-traded fund back on February 18, 2021.
  • When you buy the ETF, they buy real Bitcoin with your money and, just like buying shares of your favorite stock, you can buy and sell Bitcoin seamlessly in your portfolio. Their prospectus, however, acknowledges that it’s not exactly the world’s most secure investment stating that "the loss or destruction of certain ‘private keys’ could prevent the Fund from accessing its bitcoin. Loss of these private keys may be irreversible and could result in the loss of all or substantially all of the Fund’s assets” so its not something you’d want to plow too much money into.
  • Go here for chart of most recent pricing.

Bitcoin and Ethereum

Below are the performances of Bitcoin and Ethereum since the end of November in descending order:

1. Bitcoin: -15.4%

2.  Ethereum: -15.5%

The above analysis shows that only 9 of the 23 cryptocurrency/blockchain ETFs performed better than the physical Bitcoin and Ethereum assets so, if you are considering investing in cryptocurrencies, perhaps one of the 9 ETFs is right for you depending on the results of your due diligence.

To complete the overview of this market sector below are five other cryptocurrency investment vehicles to consider, namely:

Inverse Cryptocurrency ETF

1. BetaPro Inverse Bitcoin ETF (BITI and BITI.U): +17.4%

  • launched in April 2021,
  • designed to provide daily investment results through short investments in bitcoin futures that endeavor to correspond to the single inverse (opposite) performance of an index that replicates the returns generated over time through long notional investments in Bitcoin Futures.
  • Go here for chart of most recent pricing.

Cryptocurrency Funds/Trust

1. Bitcoin Strategy ProFund Investor Fund (BTCFX): -12.9%

  • launched in late July 2021,
  • invests in Bitcoin futures contracts and in Canadian ETFs that invest in Bitcoin directly, and also can invest in money market instruments such as U.S. Treasuries, and
  • has a low $1,000 minimum initial purchase, as well as a moderate 1.15% expense ratio.
  • Go here for chart of most recent pricing.

2. The Bitwise 10 Crypto Index Fund (BITW): -8.8%

  • launched in 2017 but has only become available over-the-counter since December 2020, and
  • tracks the performance of the Bitwise 10 Large Cap Crypto Index which represents the 10 largest investable cryptocurrencies accounting for 70% of the total crypto market and, because BITW is weighted by market capitalization, Bitcoin accounts for 65% of the portfolio compared to Ethereum, at 25%, and Cardano at a distant third at 4%.
  • Go here for chart of most recent pricing.

3. Grayscale Bitcoin Trust (GBTC): -19.3%

  • solely and passively invested in Bitcoin, enabling investors to gain exposure to Bitcoin in the form of a security while avoiding the challenges of buying, storing, and safekeeping Bitcoin directly, and
  • Investors can buy and sell shares through most traditional brokerage accounts at prices dictated by the market.
  • Go here for chart of most recent pricing.

5. Grayscale Ethereum Trust (ETHE): -19.9%

  • solely and passively invested in Ethereum, enabling investors to gain exposure to ETH in the form of a security while avoiding the challenges of buying, storing, and safekeeping ETH directly, and
  • investors can buy and sell shares through most traditional brokerage accounts at prices dictated by the market.
  • Go here for chart of most recent pricing.

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