Cryptographically secured currencies like Bitcoin were first introduced in 2009 when Satoshi Nakamoto released the blueprint for anonymous money with no central authority or intermediary. It was designed from scratch by hackers operating on behalf of everyone burned during banking crises worldwide since then (e.g., 2008 US mortgage crisis).
The rise over recent months has seen these coins become popular worldwide—especially among those seeking greater financial freedom than what mainstream systems offer them currently- possibly because, until now, there hasn’t been anything quite like this out there!
Cryptocurrency popularity has exploded in recent years, with over 1,500 different cryptocurrencies now in existence. While some investors have purchased individual cryptocurrencies, others have opted for cryptocurrency exchange-traded funds (ETFs). ETFs offer a way to invest in a basket of cryptocurrencies rather than investing in just one. It can provide investors with greater diversification and lower risk.
Best cryptocurrency ETFs
There are many reasons to invest in cryptocurrency ETFs. Cryptocurrency is inherently volatile, making it a risky investment for retail investors who don’t have the time or resources to mine bitcoin. Additionally, cryptocurrency ETFs can be considered more trustworthy than most smaller cryptocurrencies because they are backed by an actual commodity instead of just code.
There are several different types of cryptocurrency ETFs. Still, most fall into two categories: traditional ETFs that hold shares of other funds containing digital assets and actively managed ETF s that attempt to beat the market by actively trading cryptocurrencies.
The two largest cryptocurrencies ETFs are the Grayscale Bitcoin Investment Trust (OTCPK: GBTC) and the ARK Web x.0 ETF (NYSEARCA: ARKW).
Both of these funds own large amounts of bitcoin, which they keep in cold storage with regulated custodians. The only difference between funds is their structure; GBTC is a trust. It functions like an open-end mutual fund without requiring investors to pay fees to advisors or mediators, while ARKW is an ETF traded on an exchange like every other stock or commodity.
GBTC currently holds $1.37B worth of bitcoin, making it the largest and most liquid fund of its kind. However, GBTC is limited to accredited investors only because it trusts.
ARKW has been growing in popularity recently, with over $500M in assets under management as of September 2018. This fund owns stakes in many different blockchain companies, including BitShares (BTS), Ethereum (ETH), Bitcoin Cash (BCH), and Ripple (XRP).
Actively managed ETFs
There are also several actively managed cryptocurrency ETFs available for investment. These funds are run by experienced traders who attempt to beat the market by trading cryptocurrencies.
One such fund is the Reality Shares Nasdaq NexGen Economy ETF (BLCN), launched in 2018. This fund owns shares of companies that are actively working to bring blockchain technology to the mainstream economy, including IBM (IBM) and Microsoft (MSFT)
Another famous actively managed cryptocurrency ETF is the VanEck Vectors Bitcoin Strategy ETF (BTCST). This fund is designed to expose investors to bitcoin without owning or storing the digital asset.
The most popular passively managed cryptocurrency ETF is the Grayscale Ethereum Trust (OTCQX: ETF). This trust holds a portfolio of ether, the native currency of the Ethereum network.
Choosing the best cryptocurrency ETF for you
When choosing a cryptocurrency ETF, it is essential to consider your investment goals and risk tolerance. If you want a safe way to invest in digital assets, then a traditional ETF that holds shares of other funds may be the right choice for you.
If you prefer a more aggressive investment that offers the potential to beat the market, then an actively managed cryptocurrency ETF may be a better option. Remember that these funds are riskier and have higher fees than traditional ETFs.
Cryptocurrency is a volatile asset and can quickly lose value. Investing in an ETF does not guarantee a profit, and you could lose money if the underlying asset drops in value. No matter which fund you choose, make sure to do your research before investing.
Hopefully, this article has helped explain some of the best cryptocurrency ETFs available for investment. If you have any questions, please don’t hesitate to ask in the comments below!
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