Investing in the cryptocurrency market can be overwhelming due to its volatility and complexity. Crypto-based exchange-traded funds (ETFs) offer a streamlined way to gain exposure to digital assets without directly holding cryptocurrencies. As the market rebounds—up over 60% in early 2023—these ETFs have emerged as top performers. Below, we explore three leading crypto ETFs to diversify your portfolio.
1. Valkyrie Bitcoin Miners ETF (WGMI)
Overview
Bitcoin, the dominant cryptocurrency, often sets the tone for the broader market. Its 60% surge in 2023 has revitalized Bitcoin mining profitability. The Valkyrie Bitcoin Miners ETF capitalizes on this trend, delivering a staggering 146% year-to-date return.
Key Features
- Exposure to Bitcoin Mining: Invests in top global Bitcoin miners.
- High Volatility: Miners’ profits correlate closely with Bitcoin’s price swings.
- Low Cost: 0.75% expense ratio.
Why Invest?
After losing 80% of its value during the 2022 bear market, WGMI is now poised to benefit from a potential Bitcoin bull run.
2. VanEck Digital Transformation ETF (DAPP)
Overview
The VanEck Digital Transformation ETF takes a broader approach by investing in companies driving crypto adoption, including blockchain tech, digital payments, and cybersecurity. It has returned 119% in 2023.
Key Features
- Diverse Holdings: Includes Coinbase, MicroStrategy, and Galaxy Digital (15% of the fund).
- Balanced Risk: Less reliant on mining than WGMI.
- Cost-Effective: 0.5% expense ratio.
Why Invest?
DAPP offers diversified crypto exposure at a lower cost, making it ideal for long-term growth.
3. iShares Blockchain and Tech ETF (IBLC)
Overview
While less explosive than WGMI or DAPP, the iShares Blockchain and Tech ETF has gained 84% in 2023. It blends blockchain innovators with established tech giants.
Key Features
- Tech-Crypto Hybrid: Holds Block, Nvidia, IBM, and PayPal.
- Reduced Volatility: Diversification mitigates crypto’s wild swings.
- Low Fees: 0.47% expense ratio.
Why Invest?
IBLC is perfect for investors seeking crypto exposure alongside stable tech investments.
FAQs
Q1: Are crypto ETFs safer than buying cryptocurrencies directly?
A: Yes. ETFs mitigate risks like exchange hacks and wallet management while offering diversified exposure.
Q2: How do crypto ETFs perform during bear markets?
A: They often decline with crypto prices but may recover faster due to institutional backing (e.g., WGMI’s 2023 rebound).
Q3: What’s the average expense ratio for crypto ETFs?
A: Typically 0.47%–0.75%, lower than many actively managed funds.
👉 Discover more crypto investment strategies
Final Thoughts
These ETFs—WGMI, DAPP, and IBLC—provide unique avenues to tap into the crypto boom while balancing risk. Whether you’re bullish on Bitcoin miners or prefer a diversified tech-crypto mix, there’s an ETF to match your strategy.
For deeper insights, explore our guide on 👉 crypto market trends.