7 best cryptocurrency etfs to buy

In recent years, cryptocurrency has surged in popularity, attracting both seasoned investors and newcomers seeking to diversify their portfolios. While direct investment in cryptocurrencies like Bitcoin and Ethereum remains popular, many are turning to cryptocurrency Exchange-Traded Funds (ETFs) as a safer, more accessible alternative. Crypto ETFs offer the benefits of digital assets without the complexity of managing wallets or private keys. In this article, we’ll explore the 7 best cryptocurrency ETFs to buy right now, and provide insights to help you make a confident investment decision in 2024.

Discover the Top 7 Cryptocurrency ETFs to Invest in Now

1. ProShares Bitcoin Strategy ETF (BITO)

ProShares Bitcoin Strategy ETF, better known by its ticker BITO, is one of the first and most prominent Bitcoin-linked ETFs available in the United States. Unlike direct Bitcoin investments, BITO offers exposure to Bitcoin futures contracts, providing a regulated pathway to participate in Bitcoin’s price movements. This ETF trades on major exchanges, allowing investors to enter the cryptocurrency market without the hassle of setting up a crypto wallet.

One major advantage of BITO is its regulatory oversight, which adds a layer of investor safety compared to unregulated crypto exchanges. The ETF’s structure makes it suitable for both individual investors and institutions looking for Bitcoin exposure within traditional portfolios. However, it’s important to note that futures-based ETFs may not track the underlying asset perfectly, especially during periods of high volatility.

For those who want to benefit from Bitcoin’s potential growth while minimizing direct exposure to the risks of managing crypto holdings, BITO represents a practical solution. Its popularity and liquidity also mean that buying and selling shares is straightforward, making it an ideal entry point for crypto-curious investors.

2. Grayscale Bitcoin Trust (GBTC)

Grayscale Bitcoin Trust (GBTC) is not a traditional ETF but operates in a similar manner, offering exposure to Bitcoin through shares traded on OTC markets. GBTC was one of the earliest options for institutional and retail investors to gain Bitcoin exposure within a brokerage account. The trust holds actual Bitcoin, giving shareholders indirect ownership of the cryptocurrency.

GBTC’s main appeal lies in its simplicity and accessibility. There’s no need to worry about private keys, security breaches, or crypto exchange hacks—investors simply buy and sell shares as they would with any other security. As the trust grows, it continues to advocate for conversion into a full-fledged ETF, which could further improve its benefits for shareholders.

It’s important to be aware that GBTC can trade at a premium or discount to the underlying value of its Bitcoin holdings. While this can sometimes provide bargain opportunities, it also adds a level of complexity that investors should carefully consider before buying.

3. Bitwise Crypto Industry Innovators ETF (BITQ)

The Bitwise Crypto Industry Innovators ETF (BITQ) offers a unique approach, focusing on companies at the forefront of the crypto economy. Rather than holding digital assets directly, BITQ invests in publicly traded companies with significant exposure to cryptocurrencies or blockchain technology, such as Coinbase, MicroStrategy, and Riot Platforms.

This approach diversifies risk by spreading investments across the broader crypto ecosystem. If you’re interested in the growth potential of blockchain and crypto-related businesses, BITQ provides targeted exposure without the direct volatility of coins like Bitcoin or Ethereum. This makes it particularly appealing for cautious investors who want to benefit from the sector’s expansion.

BITQ’s basket of stocks covers various industries, from mining and trading to payment services and blockchain innovation. This diversity can help smooth out the ups and downs of individual coin prices, offering a more balanced entry to the world of digital assets.

4. Valkyrie Bitcoin Strategy ETF (BTF)

Valkyrie Bitcoin Strategy ETF (BTF) is another futures-based Bitcoin ETF, similar to BITO, but with its own unique management style and expense structure. BTF seeks to provide capital appreciation by investing in Bitcoin futures traded on the Chicago Mercantile Exchange (CME).

The fund is managed by Valkyrie Investments, a firm specializing in digital asset investment products. BTF is designed for investors who want exposure to Bitcoin’s price movements but prefer the regulatory and operational framework of traditional financial markets. It offers daily liquidity and can be traded like any other stock or ETF.

While BTF is a relatively new entrant compared to some of its competitors, its strong management team and focus on investor education make it a compelling option for 2024. As more investors seek regulated crypto exposure, BTF is well-positioned to grow in popularity.

5. Global X Blockchain & Bitcoin Strategy ETF (BITS)

Global X Blockchain & Bitcoin Strategy ETF (BITS) stands out by providing a dual approach: it invests in both Bitcoin futures and companies involved in the blockchain space. This hybrid structure offers investors exposure to both the price action of Bitcoin and the broader blockchain revolution.

BITS is ideal for those who believe in the long-term potential of blockchain technology beyond just cryptocurrencies. The ETF includes companies developing decentralized finance (DeFi) solutions, digital asset exchanges, and blockchain infrastructure providers. This diversification tends to reduce the portfolio’s overall risk while capturing upside from multiple angles.

By balancing exposure between Bitcoin and blockchain companies, BITS caters to investors seeking growth in this transformative sector while mitigating some of the inherent volatility in the crypto market.

6. Amplify Transformational Data Sharing ETF (BLOK)

The Amplify Transformational Data Sharing ETF (BLOK) is one of the most established blockchain-focused ETFs. Instead of holding cryptocurrencies directly, BLOK invests in companies driving innovation in blockchain technology, including established blue chips and emerging startups.

BLOK offers broad exposure to the global blockchain industry, encompassing sectors such as finance, logistics, healthcare, and more. The fund’s active management strategy allows it to adapt rapidly to changes in the blockchain space, ensuring that holdings stay relevant and promising.

For investors who want to gain exposure to the technological backbone of cryptocurrencies without direct coin ownership, BLOK is a robust and flexible investment choice. Its consistent performance and strong asset base make it a top pick for 2024.

7. Invesco Alerian Galaxy Crypto Economy ETF (SATO)

The Invesco Alerian Galaxy Crypto Economy ETF (SATO) is another standout option for those looking to invest in the broader crypto economy. SATO invests in both crypto miners and companies developing blockchain applications, as well as holding a portion in Bitcoin futures.

SATO’s diversified approach means that it benefits from the entire digital asset ecosystem’s growth, not just the price of individual coins. By including companies from different segments—mining, hardware, software, and financial services—SATO seeks to capture value wherever it arises in the crypto landscape.

For investors who want a comprehensive “one-stop shop” for crypto exposure, SATO offers a compelling mix of direct and indirect investments in the industry, making it an attractive ETF to consider in 2024.

What to Consider Before Buying Crypto ETFs in 2024

Before diving into crypto ETFs, it’s essential to understand your own risk profile and investment goals. Cryptocurrencies and related investments are known for their high volatility, and while ETFs can mitigate some risks through diversification, they still tend to be more volatile than traditional assets. Consider how much of your portfolio you’re willing to allocate to this emerging sector, and be prepared for price swings.

Another key factor is the structure of the ETF itself. Some crypto ETFs invest in futures contracts, while others hold stocks of blockchain companies or actual cryptocurrencies. Each structure comes with its own set of risks and benefits. Futures-based ETFs, for example, may not track spot prices perfectly and can incur additional costs due to rolling contracts. On the other hand, equity-focused ETFs might underperform if crypto prices soar but blockchain adoption lags.

Finally, pay attention to fees, liquidity, and fund management experience. ETF expense ratios can eat into returns over time, especially in a volatile market. Look for funds with reasonable fees, robust trading volumes, and a reputable management team with experience in both traditional finance and digital assets. As the world of crypto ETFs continues to evolve in 2024, staying informed and vigilant will help you make the best choices for your investment journey.

Cryptocurrency ETFs are an exciting gateway to the world of digital assets, offering exposure to the fast-growing sector without the technical complexities of direct crypto ownership. Whether you’re seeking growth through Bitcoin futures, blockchain innovation, or the broader crypto economy, there’s an ETF suited to your goals and risk tolerance. With careful research and consideration of your investment objectives, these seven top cryptocurrency ETFs can help you harness the potential of the digital revolution while mitigating some of its risks. As always, consult with a financial advisor to ensure your investment choices align with your long-term strategy—and enjoy exploring the dynamic world of crypto investing.