The Cryptocurrency ETF Market Explored

A lot is happening in the cryptocurrency market these days. What follows is a recap of some of the major developments last week and so far this week, and a summary of all the cryptocurrency ETFs currently trading on Canadian and American exchanges with links to their charts and daily pricing.

New Cryptocurrencies This Week

1. China launched the world’s first government-backed cryptocurrency on Tuesday, November 2nd, 2021, and, if the digital yuan succeeds, and weakens the USD too much, the dollar’s status as global reserve currency could also be at stake. Read: China’s Launch Of World’s First Government-backed Cryptocurrency (e-Yuan) Puts USD As World’s Reserve Currency At Risk

2. ProShares Bitcoin Strategy ETF (BITO) began trading last week making 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.

3. Valkyrie Bitcoin Strategy ETF (BTF) was launched last Friday and, like its peer the ProShares Bitcoin Strategy ETF, this ETF tracks Bitcoin futures, rather than the spot price of Bitcoin itself. Go here for chart of most recent pricing.

4. The Volt Equity ETF (BTCRwas introduced last week as well, and, rather than dealing in futures contracts like BITO and BTF, BTCR offers exposure to cryptocurrency through assets tied to the market, like miners and crypto-centric tech plays. The ETF also 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.

5. The VanEck Bitcoin Strategy ETF (XBTF) should begin trading any day now and, like BITO and BTF, offers investors a way to gain exposure to Bitcoin through the futures market but offers a management fee of 0.65% which is markedly lower than the 0.95% fee charged by both BITO and BTF.

Other Cryptocurrency ETFs

1. The Amplify Transformational Data Sharing ETF (BLOK) is an actively managed fund that invests in companies companies that are 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.

2. The Bitwise 10 Crypto Index Fund (BITW), launched in 2017, only became available over-the-counter in December 2020, and it 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. 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. The Bitwise Crypto Industry Innovators ETF (BITQ), another equity-focused cryptocurrency ETF, was launched on May 21, has 30 holdings and tracks the performance of the Bitwise Crypto Innovators 30 Index, and the top 10 stocks account for a massive 64% of assets. This ETF gives you 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.

4. The Siren Nasdaq NexGen Economy ETF (BLCN), a passively managed (read: index) ETF launched in January, 2018, has 63 global constituents  with the U.S. accounting for 53% of assets, Japan for 13%, China for 13% and the rest coming from other nations. The ETF is reasonably diversified with the top 10 holdings accounting for just 20% of its overall assets and the top three sectors are technology (43%), financials (33%) and communications (11%). The index tracks the performance of the Nasdaq Blockchain Economy Index, which is made up of stocks that support blockchain technology or utilize it for their own businesses. Go here for chart of most recent pricing.

5. The First Trust Indxx Innovative Transaction & Process ETF (LEGR), launched in 2018, is another equity-based cryptocurrency ETF. It tracks the performance of the Indxx Blockchain Index, an index that follows companies that have some connection to blockchain technologies. The portfolio is capped at 100 stocks of which 39% are in the financial sector, 32% in technology and 9% in consumer technology. The top three countries are the U.S. (34%), China (12%), and India (7%). This also is a large-cap-heavy fund, with a median market cap of almost $94 billion. Go here for chart of most recent pricing.

6. The Simplify US Equity PLUS GBTC ETF (SPBC), which launched at the end of May, provides a 100% investment in equities and an additional 10%, to a maximum 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.

7. The Global X Blockchain ETF (BKCH) tracks the performance of the Solactive Blockchain Index, a collection of stocks that have operations that utilize or benefit from digital assets and blockchain technologies. It 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%). The U.S., Canada, and China account for almost 92% of the portfolio. Go here for chart of most recent pricing.

8. The VanEck Digital Transformation ETF (DAPP), launched in April 2021, tracks the performance of the MVIS Global Digital Assets Equity Index, which invests in companies participating in the digital assets economy. DAPP is a focused portfolio with just 25 holdings of which the top 10 account for 64% of total assets. 75% of the portfolio is invested in technology stocks, with the U.S. at 62% of assets, followed by Canada (14%), China (13%) and a smattering of other countries. Go here for chart of most recent pricing.

9. The Bitcoin Strategy ProFund Investor (BTCFX), launched in late July, seeks capital appreciation by investing in Bitcoin futures contracts. It also can invest in Canadian ETFs that invest in Bitcoin directly, and if it wants, it can invest in money market instruments such as U.S. Treasuries. BTCFX features a low $1,000 minimum initial purchase, as well as a moderate 1.15% expense ratio. BTCFX is a way to gain exposure while leaving the heavy lifting to professional investors. Go here for chart of most recent pricing.

10. The First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT) was launched on Sept. 20, 2021, by SkyBridge Capital II LLC, an alternative investment manager founded by Anthony Scaramucci, the one-time White House communications director for Donald Trump. CRPT plans to invest at least 80% of net assets in "crypto industry companies" (50%) and "digital economy companies" (50%). It 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.

11. The Evolve Bitcoin ETF (EBIT and EBIT.U), launched on February 17th, 2021 with a management fee of $0.75%, provides investors a practical way to invest directly in Bitcoin using a brokerage account. Go here for chart of most recent pricing.

12. The Purpose Bitcoin ETF (BTCC.U) 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.

13. CI Galaxy Bitcoin ETF (BTCX.U and BTCX.B) was launched on March 10th, 2021 with the lowest fee (0.4%) of any cryptocurrency ETF. Go here for chart of most recent pricing.

14. The Evolve Ether ETF (ETHR and ETHR.U) launched the world's first ether ETF on April 20, 2021 with a management fee of 0.75%. It provides investors with exposure to the daily price movements of the U.S. dollar price of Ether (ETHR.U) and in Canadian dollars (ETHR). Go here for chart of most recent pricing.

15. The 3iQ CoinShares Ether ETF (ETHQ and ETHQ.U) began trading on the Toronto Stock Exchange on April 23, 2021 with the intent to provide unitholders with exposure to digital currency Ether, along with daily price movements of the U.S. dollar price of Ether, and the opportunity for long-term capital appreciation. The ETF has a management fee of 1%, and it states that its management expense ratio will not exceed 1.25%. Go here for chart of most recent pricing.

16. The Evolve Cryptocurrencies ETF (ETC and ETC.U) began trading on the TSX Wednesday, September 29, 2021, by initially investing in the Evolve Bitcoin ETF (EBIT.U) and Evolve Ether ETF (ETHR) - and because of this will pay no management fees - as a convenient way to obtain exposure to bitcoin and ether on a market capitalization basis. Go here for chart of most recent pricing.

Other Cryptocurrency Developments

1. Grayscale Investments announced last Tuesday that it has filed with the U.S. Securities and Exchange Commission to convert the popular Grayscale Bitcoin Trust into a Bitcoin spot ETF.

2. The Direxion Bitcoin Strategy Bear ETF, which planned to offer managed short exposure to CME bitcoin futures contracts has been withdrawn its application at the request of the SEC as has fund manager Valkyrie for its planned leveraged bitcoin futures ETF.

Other Related Crypto News

Interactive Brokers has introduced cryptocurrency trading for registered investment advisors in the U.S., allowing them to trade and custody bitcoin, ethereum, litecoin and bitcoin cash via Paxos Trust on behalf of clients.

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