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Cryptocurrency ETFs - What are Your Options?

If you want to explore this genre, you will have three alternatives on your hand. Here is what you need to know about them.

Posted: 25th November 2022 by Finance Monthly
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A Cryptocurrency ETF is a type of exchange-traded fund that has a little bit of exposure in the asset segment. And like a coin, you can also purchase it on a major stock exchange.

Sounds pretty attractive, right?

Well, it is, to some extent. 

On paper, an ETF can be a good option for people who’re considering investing in the market at a lower sort of investment. But, when it comes to Crypto, your options in this aspect will be a bit limited due to the infancy of the investment genre. If you are interested to know more about it, read more here.

But, if you still want to explore this genre, you will have three alternatives on your hand. Here is what you need to know about them.

Types of Cryptocurrency ETFs

Investing in a Crypto ETF can be quite tricky, especially for a first-time investor. Therefore, it is always better to learn as much as possible before putting your money into it. Hopefully, we can help you out in this aspect through this article.

1: Crypto Stock ETF.

A Crypto Stock ETF is created or made up of one or more companies that own Crypto. But an organization, that has a part of its business in the arena of Cryptocurrency, can be added to the same category too. The BITO (ProShares Bitcoin Strategy ETF) is an example of it.

2: Actual Crypto Fund.

An actual Crypto fund is a type of ETF that’s been sold previously to an accredited investor. It has now been released by them and is currently available on an OTC exchange. However, the ETF is not sold on a conventional marketplace, like the New York Stock Exchange.

3: Bitcoin ETF.

As the name implies, a Bitcoin ETF is based on BTC. Therefore, you can purchase them on public markets. But, here’s the thing. A Bitcoin ETF doesn’t hold BTC. Instead, they tend to have or contain a derivative, such as a future contract or something as such.

Why Would You Want a Crypto ETF?

Investing in an ETF can be an excellent option for people who don’t have the time to research anything but want to create a diversified profile nonetheless. When it comes to investment, Cryptocurrency should be a single part of your diversified portfolio. But, if you still want to diversify your money, even more, it’s best to opt for an ETF.

Nonetheless, if you want, you can also diversify your Crypto portfolio without investing in an ETF. For example, if you want to go straight up into it, it might be best to do some research or invest directly in the Cryptocurrency market. You can also cooperate with an investment expert to learn more about the market and invest your money accordingly.

Benefits of Crypto ETF

Although Crypto ETFs have been here for quite some time, it’s still not being accepted as a form of payment in many countries. In any case, if you own something as such, you will be benefiting from the following -

  • An ETF provider will be responsible for the fund’s safety and so on. Thus, the overall security will be quite high in this aspect. There’s no need to worry about anything.
  • An ETF is much more affordable than a Cryptocoin, like BTC or Ether. However, it’ll be quite volatile, as it’s directly associated with Cryptocurrency.
  • The learning curve of investing in an ETF may seem a little difficult at first. But, it’s a much better and easier option once you get a hang of it. 
  • Owning Crypto ETFs can save an investor from various expenses like network fees or transaction charges. The less you have to pay, the better.

The Final Say!

Cryptocurrency ETFs are, indeed, safer than you may have guessed. 

However, again, the market is volatile, after all. So, it’s better to learn more about how you’re going to invest there properly. If it’s your first time, I would ask you to talk to someone who’s an expert in this aspect. The better people you talk to, the higher your chance of getting more and more money will be. Also, if you are confused about something, make sure to ask about it in the comment section below. I will try my best to help you out in any way I can.

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