5 Blockchain ETFs to Consider If You‘re Interested in Cryptocurrency

Crypto ETFs are less risky and give higher returns in the long run.

The waning interest in cryptos contrasts sharply with the growing number of cryptocurrency (exchange traded funds) ETF filings, with at least 18 applications filed this year. ETFs provide a one-of-a-kind option to participate in a sector indirectly.

Nonetheless, U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler dampened the renewed optimism among Bitcoin (BTC) exchange-traded fund advocates hoping for possible approval for a Bitcoin-based exchange-traded fund, saying digital currencies need much more regulation before they can enter the ETF universe.

ETFs are considered low-risk investments. Consider them a mini-portfolio because they hold a basket of stocks. Cryptocurrencies, on the other hand, are notoriously volatile. Consider Bitcoin, the world's most popular cryptocurrency.

In April, it reached an all-time high of almost $65,000. However, the price began to fluctuate drastically. As environmental and regulatory concerns grew, it fell below $30,000 in June, but has since recovered to more over $48,000, momentarily exceeding $50,000, even as the United States Senate passed an infrastructure measure that would allow for comprehensive control of virtual currencies.

As a result, it may appear that ETFs and cryptos are diametrically opposed. However, investing in these digital assets individually may appear difficult. It might be a better idea to set your mind at ease by investing in crypto ETFs. They offer immediate diversification, are more secure, and are listed on major stock markets such as Nasdaq and the New York Stock Exchange, making them tax efficient. Furthermore, while an ETF provides diversification benefits to the holder, it still trades like a stock.

So, without further ado, here are five cryptocurrency ETFs that are making waves:

#1. Amplify Transformational Data Sharing ETF (BLOK)

Amplify Transformational Data Sharing ETF began trading in 2018. Unlike most ETFs, it does not track an index. Instead, it employs a mixed investment approach that invests capital in a mix of value and growth equities with varying market capitalisation around the world, with a concentration on the software and services and diversified financials industries. As a result, it differs from some of the other crypto ETFs available.

Hut 8 Mining (HUT), a Canadian cryptocurrency mining company that provides blockchain infrastructure and technology solutions; MicroStrategy (MSTR), a provider of enterprise software platforms; and Riot Blockchain (RIOT), a Bitcoin mining company that provides special cryptocurrency mining computers, are among the major holdings.

Also, don't imagine that the company solely invests in cryptocurrencies. When you invest in this one, you also receive some great diversification. After all, one of the fund's top holdings is Square (SQ), a financial services and digital payments company. This ETF has a 0.71 percent cost ratio and is invested in 47 different firms. The 52-week low for BLOK is $23.40 and the 52-week high is $62.94. Amplify offers a 96 percent one-year return. BLOK offers a 1.4 percent dividend yield and has paid 66 cents per share in the last year.

#2. Siren Nasdaq NexGen Economy ETF (BLCN)

The Nasdaq Blockchain Economy Index, which BLCN tracks, is designed to quantify the returns of companies involved in “developing, researching, supporting, creating, or exploiting blockchain technology.”

The cost ratio for this ETF is 0.68 percent. BLCN has $276.6 million in nett assets. It is currently trading at a 52-week low of $32.88 and a 52-week high of $53.31. It pays a 60-cent annual dividend and has a one-year return of 28 percent.

Class A shares of Coinbase Global (COIN), which operates a cryptocurrency exchange platform; class A shares of Square; Advanced Micro Devices (AMD), a global semiconductor company based in Santa Clara, California, that develops computer processors and related technologies for business and consumer markets; and Accenture (ACN), an Irish multinational company, are among the top holdings.

#3. First Trust Indxx Innovative Transaction & Process ETF (LEGR)

LEGR follows the Indxx Blockchain Index, which analyses the performance of firms that use, invest in, create, or have goods that will profit from blockchain technology.

According to the ETF's investment philosophy, the fund typically invests at least 90% of its nett assets in equities securities that compose the index and has a total of 100 holdings. As a result, the majority of the stocks in its portfolio are from companies in the information technology and finance industries.

LEGR has a 0.65 percent cost ratio and $120 million in assets under management. Nvidia (NVDA), a maker of graphics processing units; Oracle (ORCL), a multinational computer technology company; and Wipro (WIT), an Indian multinational that provides information technology, consulting, and business process services, are among the top holdings.

#4. Purpose Bitcoin ETF (BTTC)

Purpose After launching with more than $590 million in AUM in February, Bitcoin ETF, the world's first Bitcoin ETF, has surpassed $1 billion in assets under management. A 1% management charge is levied on the ETF.

It invests directly in physically settled Bitcoin, rather than derivatives, and keeps it in cold storage, eliminating the possibility of trading at significant premiums to the value of the ETF's underlying Bitcoin holdings. This enables quick access to cryptocurrencies without the need to buy and trade cryptocurrency directly through a wallet on an exchange like Coinbase.

The ETF's MER Management Expense Ratio (MER) has been set at 1.5 percent. As a result, if the MER is less than 1.5 percent, the savings are passed on to investors.

#5. Innovation Shares NextGen Protocol ETF (KOIN)

The Innovation Shares NextGen Protocol ETF, which debuted in 2018, tracks the Innovation Labs Blockchain Innovators Index and invests in 43 firms. It has a 0.95 percent expense ratio and a market capitalisation of $30.3 million.

Bill Gates co-founded computer behemoth Microsoft (MSFT), as well as Nvidia, Visa (V), and Mastercard (MA), the world's two largest payment card network processors. The fund invests in big and mid-cap global technology equities using a “passive management” technique. As a result, a slew of well-known names are strongly represented in this portfolio.

Its 52-week low is $30.63, and its 52-week high is $43.96. The dividend yield is 1.25 percent every year. KOIN has a one-year return of 31%. Because of its holdings, KOIN may appear to be more traditional than some of the other ETFs on this list. As a result, if you are a risk-averse investor, this one should be exactly up your alley.

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