Cryptocurrency ETFs

Crypto Christmas: 3 Best Cryptocurrency ETFs To Buy Now

Summary

  • Bitcoin’s Milestone: Surpassed $100,000 for the first time this month, influenced by favorable political shifts post-U.S. presidential election.
  • Crypto ETFs: Provide exposure by investing directly in digital assets and companies within the digital economy.
  • Investment Perspective: Historically high-risk, but increasing regulatory acceptance may offer growth opportunities in digital assets.
  • Top 3 Crypto-Focused ETFs: Averaging a one-year return of +146%, these ETFs exhibit strong momentum and offer diverse exposure to crypto and related assets.

Introduction

The anticipation of a ‘Santa Claus Rally’—a potential stock market surge during late December and early January—is a common theme among investors. This year, cryptocurrency enthusiasts have an additional reason to celebrate: Bitcoin has reached a historic milestone, surpassing $100,000. This achievement is partly attributed to the recent U.S. presidential election, which brought a pro-crypto administration into power, signaling a more favorable regulatory environment for digital assets.

The Rise of Cryptocurrency ETFs

Cryptocurrency Exchange-Traded Funds (ETFs) have become a popular vehicle for investors seeking exposure to the digital asset market without directly purchasing cryptocurrencies. These ETFs invest in a range of assets, including:

  • Direct Holdings: Such as Bitcoin and Ethereum.
  • Crypto-Related Companies: Including blockchain technology firms and crypto mining companies.

The increasing regulatory acceptance and mainstream adoption of cryptocurrencies have enhanced the appeal of these investment instruments.

Top 3 Cryptocurrency ETFs

Based on Seeking Alpha’s Quant Ratings, here are three cryptocurrency-focused ETFs demonstrating significant momentum:

1. Bitwise 10 Crypto Index Fund (OTCQX: BITW)

  • Description: Offers exposure to the top 10 largest cryptocurrencies, weighted by market capitalization.
  • Performance: Achieved a one-year return of approximately 150%.
  • Holdings: Includes major cryptocurrencies like Bitcoin, Ethereum, Solana, and others.
  • Expense Ratio: 2.5%.

2. ProShares Bitcoin Strategy ETF (NYSEARCA: BTF)

  • Description: Focuses on Bitcoin futures contracts to provide capital appreciation.
  • Performance: Recorded a one-year return of around 140%.
  • Strategy: Invests in Bitcoin futures rather than direct Bitcoin holdings.
  • Expense Ratio: 0.95%.

3. Valkyrie Bitcoin Miners ETF (NASDAQ: WGMI)

  • Description: Concentrates on companies involved in Bitcoin mining operations.
  • Performance: Delivered a one-year return of approximately 148%.
  • Holdings: Includes firms like Marathon Digital Holdings and Riot Blockchain.
  • Expense Ratio: 0.75%.

Investment Considerations

While these ETFs offer a convenient way to gain exposure to the cryptocurrency market, investors should be mindful of the inherent volatility and risks associated with digital assets. It’s essential to conduct thorough research and consider individual risk tolerance before investing.

Conclusion

The recent surge in Bitcoin’s value and the growing acceptance of cryptocurrencies have positioned crypto-focused ETFs as attractive investment options. The highlighted ETFs—BITW, BTF, and WGMI—have demonstrated impressive performance over the past year, offering investors diversified exposure to the evolving digital asset landscape.

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Disclaimer: This article is for informational purposes only and should not be considered financial advice. Investing in cryptocurrencies and related ETFs involves significant risk; consult with a financial advisor before making investment decisions.

Author: Steven Cress, Head of Quantitative Strategies at Seeking Alpha.

Source: Seeking Alpha