Key Takeaways
- Crypto stocks and ETFs are a quick and easy way to invest in companies in the crypto space.
- Stocks are shares of individual companies while ETFs, mutual funds, and trusts hold some combination of crypto stocks and cryptocurrency.
- Each instrument is suitable for a different set of investors.
There are more ways to invest in crypto beyond just buying Bitcoin and Ethereum. Public crypto companies and crypto exchange-traded funds (ETFs) allow you to get exposure to crypto in a regulated environment. Instruments such as mutual funds and crypto trusts also provide a similar investment opportunity.
Most Popular Crypto Stocks and ETFs
| Tesla | Stock | TLSA | $185 | $615 Billion | 60.16 | -43% | -- | -- | -- | Blue Chip StockCrypto Exposure |
|---|---|---|---|---|---|---|---|---|---|---|
| Visa | Stock | V | $216 | $449 Billion | 31.69 | +11% | -- | -- | -- | Traditional Finance MarketsCrypto |
| Coinbase | Stock | COIN | $46 | $10.82 Billion | -8.31 | -81% | -- | -- | -- | Blue ChipCrypto Stock |
| Grayscale Bitcoin Trust | Crypto Trust | GBTC | $8.15 | $10.7 Billion | -- | -66% | 2% | $50,000 | Launched by Grayscale in 2013 | Investing in Bitcoin |
| Grayscale Ethereum Trust | Crypto Trust | ETHE | $5.98 | $3.8 Billion | -- | -70% | 2.5% | $50,000 | Launched by Grayscale in 2017 | Investing in Ethereum |
| MicroStrategy | Stock | MSTR | $194 | $2.34 Billion | -1.70 | -72% | -- | -- | -- | Bitcoin Exposure |
| Riot Blockchain | Stock | RIOT | $5 | $830 Million | -1.60 | -89% | -- | -- | -- | Bitcoin Mining Exposure |
| Amplify Transformational Data Sharing ETF | ETF | BLOK | $16.41 | $400 Million | -- | -62% | 0.71% | -- | Launched by Amplify Investments in 2018 | Diversified Crypto Bet |
| GlobalX Blockchain ETF | ETF | BKCH | $3.99 | $44 Million | -- | -85% | 0.50% | -- | Launched by GlobalX in 2021 | Low expense ratio |
| Bitwise Crypto Industry Innovators ETF | ETF | BITQ | $4.10 | $44 Million | -- | -82% | 0.85% | -- | Launched by Bitwise in 2021 | Strictly crypto companies index |
| Bitcoin Strategy ProFund | Mutual Fund | BTCFX | $10.01 | $22.8 Million | -- | -69% | 1.15% | $1,000 | Launched by ProFunds in 2021 | Going long Bitcoin |
| Short Bitcoin Strategy ProFund | Mutual Fund | BITIX | $24.49 | $800k | -- | N/A (launched in 2022) | 1.35% | $1,000 | Launched by ProFunds in 2022 | Going short Bitcoin |
Top Crypto Stocks List
| Tesla | Indirect | TLSA | $185 | $615 Billion | 60.16 | -43% | Blue Chip StockCrypto Exposure |
|---|---|---|---|---|---|---|---|
| Visa | Indirect | V | $216 | $449 Billion | 31.69 | +11% | Traditional Finance MarketsCrypto |
| Coinbase | Direct | COIN | $46 | $10.82 Billion | -8.31 | -81% | Blue Chip Crypto Stock |
| MicroStrategy | Indirect | MSTR | $194 | $2.34 Billion | -1.70 | -72% | Bitcoin Exposure |
| Riot Blockchain | Direct | RIOT | $5 | $830 Million | -1.60 | -89% | Bitcoin Mining Exposure |
1. Tesla [TSLA]
| Tesla | Indirect | TLSA | $185 | $615 Billion | 60.16 | -43% | Blue Chip Stock + Crypto Exposure |
Tesla is an American manufacturer of electric vehicles. They are the largest automobile company by market capitalization and they deliver more electric vehicles than any other car brand. Tesla also has a significant position in Bitcoin and even briefly accepted Bitcoin as a payment for Tesla cars. Tesla’s founder, Elon Musk, has been a vocal cryptocurrency supporter and the company has at times held as much as$1.5 billion of Bitcoin — making the automaker one of the largest publicly traded holders of Bitcoin.
Tesla is seen by many as one of the best stock buys available today. Investors who purchase shares of Tesla are exposed to a tech company that makes very popular automobiles. Their cryptocurrency holdings represent a small share of their total market cap, however, so it’s important to look at the fundamentals of their business rather than thinking of Tesla strictly as a cryptocurrency stock.
2. Visa [V]
| Visa | Indirect | V | $216 | $449 Billion | 31.69 | +11% | Traditional Finance Markets + Crypto |
Visa is a multinational payments processing company and one of the most valuable companies in the world. Their services are used by vendors across the world for processing customer payments through point-of-sale terminals that allow fast and easy credit and debit card transactions.
Visa has recently integrated cryptocurrencies into their payment solutions, allowing users to link their crypto balances to virtual Visa cards and pay with crypto anywhere where Visa is accepted. The program converts all crypto payments to fiat when processing transactions, so vendors aren’t actually accepting the cryptocurrency itself. Visa has partnered with over60 crypto platforms to allow users to spend their crypto balances through Visa.
Visa is one of the biggest companies in the world and its payments business is consistently growing. Despite the 2022 bear market, Visa stock has done relatively well and is up year-over-year compared to the end of 2021. As a large payments company, it’s only natural that they adopt and maintain a crypto payments platform, so a bet on Visa is a bet on their payments processing business with an added layer of crypto support.
Overall, Visa is not a pure crypto play and its stock will generally move independently of the crypto market. However, this may be a good diversified bet for those looking for as little crypto exposure as possible.
3. Coinbase [COIN]
| Coinbase | Direct | COIN | $46 | $10.82 Billion | -8.31 | -81% | Blue Chip Crypto Stock |
Coinbase is an American cryptocurrency exchange and also the only major exchange that is publicly traded. Coinbase has had a stellar track record of adoption among US customers and traders abroad. They’re also very well known for their extensive work with US regulators to ensure their exchange is safe, regulated, and a good choice for all traders.
As of November of 2022, Coinbase has publicly revealed that they hold around2 million Bitcoins that have a combined value of over$33 billion — ensuring that customer assets are well backed. As a public company, Coinbase is also required to perform quarterly financial disclosures. Overall, this makes Coinbase one of the most transparent exchanges in the crypto space.
In terms of actual stock performance, Coinbase has followed the rest of the cryptocurrency market in a significant decline from peak 2021 numbers. The exchange went public in April of 2021 and was briefly worth over$100 billion. While stock performance has declined significantly, Coinbase is a mature company that may be a good bet for anyone looking for crypto exposure over the long term.
Coinbase is considered a blue-chip crypto stock. It is a solid pick for the risk-aware investor who may be looking to buy and hold for a long time, or for new traders that are looking to stay away from risky bets. The more sophisticated investors may be able to day trade Coinbase by paying attention to their quarterly financial disclosures and making adjustments to their position accordingly.
4. MicroStrategy [MSTR]
| MicroStrategy | Indirect | MSTR | $194 | $2.34 Billion | -1.70 | -72% | Bitcoin Exposure |
MicroStrategy is a US-based company that provides enterprise software for business intelligence and a wide variety of other use cases. The company was founded in 1989 and has seen steady growth for the last few decades thanks to a stream of corporate contracts and a host of product iterations over time.
In 2020, MicroStrategy began aggressively purchasing Bitcoin. To date, they hold about130,000 Bitcoins that were purchased for close to$4 billion (or around$30,000 per Bitcoin). This means that, while MicroStrategy has a core business that has nothing to do with crypto, their large Bitcoin position influences their stock price significantly holding MicroStrategy stock exposes you to the price of Bitcoin.
It’s important to note that the Bitcoin holdings of MicroStrategy were purchased at an average price of $30,000 per Bitcoin, meaning that the market has to see significant gains before these holdings break even, let alone earn. However, for investors looking to make a diversified bet in a company with a core business outside of the crypto space that also has crypto exposure, MicroStrategy may be a good buy.
5. Riot Blockchain [RIOT]
| Riot Blockchain | Direct | RIOT | $5 | $830 Million | -1.60 | -89% | Bitcoin Mining Exposure |
Riot Blockchain is a publicly traded Bitcoin mining company. The company operates over65,000 miners in the US that have a combined capacity of750 MW. Bitcoin “mining” is the process by which new Bitcoins are introduced into the Bitcoin ecosystem.
Bitcoin is a finite protocol that dictates that there will only ever be21 million Bitcoins created. Each of these Bitcoins is created — or “mined” — by solving complex mathematical formulas that use ever-increasing amounts of computing power.
It is this mining function that companies like Riot Blockchain oversee. Their large-scale data center operations ensure their mining facilities are as efficient as possible.
At a time when many Bitcoin miners are struggling financially and even declaring bankruptcy, Riot is a strong contender for the best Bitcoin mining stock. They have over$200 million in cash reserves and their performance remains strong even amid rising electricity costs and power grid failures in Texas — the home of their largest mining operation.
Bitcoin mining is a core function of the Bitcoin ecosystem. There are currently just over 19 million Bitcoins which means there are still 2 million more remaining to be mined. Demand for mining will continue for a while, even if that demand fluctuates with the price of Bitcoin. Investors looking for a long-term crypto bet on a fundamental aspect of the Bitcoin protocol may want to give Riot Blockchain a look.
The firm has a durable business and operates in the US which is traditionally more friendly to Bitcoin mining than other major countries, both in terms of regulatory risk and price stability for electricity.
What Is A Crypto Stock?
A crypto stock is simply a share of a company that operates in the crypto space. These companies can include exchanges such as Coinbase, Bitcoin miners such as Riot Blockchain, or companies that simply have large crypto positions on their balance sheet such as MicroStrategy.
The first table below shows companies that operate purely in the crypto space while the second table shows companies that do business outside of crypto but have significant crypto exposure.
| Coinbase | Direct | COIN | $46 | $10.82 Billion | -8.31 | -81% | Blue Chip Crypto Stock |
|---|---|---|---|---|---|---|---|
| Silvergate Capital Corporation | Direct | SI | $25 | $840 Million | 6.87 | -84% | Crypto Banking |
| Riot Blockchain | Direct | RIOT | $5 | $830 Million | -1.60 | -89% | Bitcoin Mining Exposure |
| Tesla | Indirect | TLSA | $185 | $615 Billion | 60.16 | -43% | Blue Chip StockCrypto Exposure |
|---|---|---|---|---|---|---|---|
| Visa | Indirect | V | $216 | $449 Billion | 31.69 | +11% | Traditional Finance MarketsCrypto |
| MicroStrategy | Indirect | MSTR | $194 | $2.34 Billion | -1.70 | -72% | Bitcoin Exposure |
Purchasing a crypto stock exposes you to the performance of that company over time. Public companies have shareholder meetings every quarter during which they announce their performance and their stock price will fluctuate accordingly. Investing in crypto stocks is preferable if you believe strongly in the thesis of the particular company and believe they will do well.
Keep in mind, though, that the performance of many of these companies is also tied closely with the performance of crypto as a whole — which often determines how much demand they have for their services.
Pros
- Benefit from the performance of a particular company that you believe in
- Choose from a range of companies that can be more or less correlated with crypto
- Companies have a fiduciary responsibility to maximize shareholder value, unlike direct cryptocurrency investments
Cons
- Tied to the overall crypto markets, so some price moves are out of the control of the individual companies
- Subject to management changes and business factors — not as predictable as investing in a cryptocurrency
- You may need to read up on some investing terms to keep up with what’s happening in the company
An ETF or “Exchange Traded Fund” is an asset class that tracks the value of a basket of assets (such as a collection of company stocks) and offers that group of assets as a single investable vehicle. ETFs can be used to gain exposure to a wide range of crypto companies with a single investment.
Each ETF focuses on a different area that determines what companies make up its holdings. These funds always charge an “expense ratio” which is a fee taken out of your earnings that goes to cover the costs of running the fund.
Some ETFs are actively managed, while others are passively managed.
A passively managed fund simply tracks an underlying index without trading its holdings often. These ETFs usually follow general market trends — doing well when markets are up, and doing poorly when markets are down.
Actively managed ETFs, on the other hand, have money managers that are constantly moving around investor funds in an attempt to maximize returns beyond just what the markets are offering. These funds are less correlated with the broader market than active funds and their profits and losses are more random.
Examples:
- Amplify Transformational Data Sharing ETF [BLOK]
- GlobalX Blockchain ETF [BKCH]
- Bitwise Crypto Industry Innovators ETF [BITQ]
Pros
- Choose between actively managed or passively managed ETFs
- Get exposure to a wide range of companies
- Trade the crypto markets right in your brokerage account without having to set up a crypto wallet
Cons
- Funds charge an expense ratio fee
- Not all funds are available on all brokerages, so you might have to search around to find the one you want
- It can be much harder to keep track of what companies the ETF is invested in as compared to just buying individual stocks
A cryptocurrency mutual fund is an actively managed fund of crypto assets. Due to regulatory conditions in the US, there are currently very few crypto mutual funds that have been approved and made available to investors.
Unlike ETFs, which can be purchased at any point during the day, mutual funds have one price each day and all trades in or out of the fund on that day close for that particular price.
The approved mutual funds currently trade Bitcoin futures, which are trading instruments that closely track the price of Bitcoin, thus allowing investors to benefit from Bitcoin price moves without having to actually hold Bitcoin in a wallet. There are also Bitcoin “short” mutual funds which go up in price whenever Bitcoin goes down.
Examples:
- Bitcoin Strategy ProFund [BTCFX]
- Short Bitcoin Strategy ProFund [BITIX]
Pros
- Get exposure to the price of Bitcoin without having to take custody of it
- There are long and short Bitcoin mutual funds
- They’re easy to buy right in your brokerage account
Cons
- High expense ratios compared to ETFs
- Very few are available due to regulation
- Many mutual funds require a minimum investment of $1,000 or more
A crypto trust, such as Greyscale’s Bitcoin Investment trust, holds cryptocurrency in a trust structure that investors can buy into. Unlike ETFs and mutual funds, which only hold stocks and derivative contracts of cryptocurrencies, trusts can actually hold the crypto assets themselves. This simplifies the process of investing in cryptocurrencies for investors who don’t want to deal with storing Bitcoin but still want to be in on the action.
Crypto trusts also have complex rules around trading, however. The majority of trusts are first issued to private, accredited investors and only become available to traditional retail investors after a 12-month period. Additionally, these trusts, unlike passive ETFs, can often trade at a significant premium (more than the underlying price) or discount (less than the underlying price) when compared to the value of their Bitcoin holdings.
Trusts are relatively new instruments that are heavily regulated and should only be bought by traders who are familiar with the risks associated.
Examples:
- Grayscale Bitcoin Trust (GBTC)
- Grayscale Ethereum Trust (ETHE)
Pros
- Invest in crypto without having to hold actual tokens
- You can buy crypto trusts through retail brokerages like Robinhood
- Trusts like GBTC have been around since 2013, lending credibility to the instrument
Cons
- May trade at a significant premium or discount to the underlying crypto value
- Generally have high expense ratios
- Only a few approved trusts out there
Investing In Crypto Stocks, ETFs, Mutual Funds, And Trusts: What’s The Difference?
| Crypto Stocks | Stocks of a single company | Low | Low (single asset) | All investors |
|---|---|---|---|---|
| Crypto ETFs | Stocks of multiple companies | Low | Medium (multiple correlated assets) | Beginner and intermediate investors |
| Crypto Mutual Funds | Stocks of multiple companies | Medium | Medium (multiple correlated assets) | Intermediate and advanced investors |
| Crypto Trusts | Shares of a single cryptocurrency | High | Low (single asset) | Advanced investors |
Definitions:
Crypto Exposure: When it comes to crypto stocks, some companies operate squarely in the crypto space while others have a core business that’s unrelated to crypto and simply hold a lot of crypto on their balance sheets. We label the former “direct” crypto exposure, while we call the latter “indirect” crypto exposure.
Ticker Symbol: Each publicly traded stock or fund has a “ticker symbol” that’s between one and five characters and is a shorthand for the company name.
Price: The price column indicates how much it costs to buy one share of the stock or fund.
Market Cap: The market cap column applies to crypto companies specifically and indicates how much the company is valued at. Market cap is determined by multiplying all of the company’s shares by the current stock price.
P/E Ratio: The “price to earnings” ratio is an indicator used by investors to determine whether a stock is undervalued or overvalued. It’s calculated by dividing the market value of one share by the company’s annual earnings per share.
Yearly Gain: How much the stock has appreciated (or depreciated) in one year, expressed as a percentage.
Expense Ratio: ETFs, mutual funds, and trusts all charge an “expense ratio” which is a fee that goes toward the cost of running the funds. This is expressed as a total percent of all fund holdings (for example1% or0.50%) and is charged on an annual basis. For example, a fund that has a0.50% expense ratio will charge a$50 annual fee on every$10,000 invested into the fund.
AUM: Shorthand for “assets under management”, AUM represents the total value of an ETF, mutual fund, or trust. AUM is calculated by adding up the market value of all the holdings of the fund.
How To Invest In A Crypto Stock
In order to purchase stock in a publicly traded company, you will need to use a trading platform that supports the stock you want to purchase.
Not all stocks are available on every platform, so you may need to mix and match platforms to get your desired exposure. Once you purchase the stock, you may trade it or buy more at any time. Keep in mind that crypto and stock investing can be risky, however, and always do your research before putting money into any publicly traded company.
Top Crypto ETFs List
| Amplify Transformational Data Sharing ETF | BLOK | $16.41 | $400 Million | 0.71% | -62% | Launched by Amplify Investments in 2018 | Diversified Crypto Bet |
|---|---|---|---|---|---|---|---|
| GlobalX Blockchain ETF | BKCH | $3.99 | $44 Million | 0.50% | -85% | Launched by GlobalX in 2021 | Low expense ratio |
| Bitwise Crypto Industry Innovators ETF | BITQ | $4.10 | $44 Million | 0.85% | -82% | Launched by Bitwise in 2021 | Strictly crypto companies index |
1. Amplify Transformational Data Sharing ETF [BLOK]
| Amplify Transformational Data Sharing ETF | BLOK | $16.41 | $400 Million | 0.71% | -62% | Launched by Amplify Investments in 2018 | Diversified Crypto Bet |
BLOK is a diversified ETF that includes a wide range of non-crypto bets alongside some popular blockchain companies such as Coinbase and MicroStrategy. The fund is actively managed, which means that there are money managers constantly trading the stocks within the fund in order to maximize returns. With$400 million in assets under management, BLOK is one of the largest ETFs that includes significant crypto exposure.
The BLOK ETF is primarily made up of technology stocks (42% of the fund) and financial services stocks (39%) of the fund. In terms of global regions,72% of the fund’s companies are based in North America. The breakdown of the top companies in the fund as a percentage of all holdings is:
- International Business Machines Corp: 6.50%
- Accenture plc - Ordinary Shares - Class A: 6.03%
- Overstock.com Inc: 5.29%
- Microstrategy Inc. - Ordinary Shares - Class A: 4.71%
- CME Group Inc - Ordinary Shares - Class A: 4.47%
- Block Inc - Ordinary Shares - Class A: 3.70%
- Coinbase Global Inc - Ordinary Shares - Class A: 2.82%
The Amplify Transformational Data Sharing ETF is a good bet for investors who want to buy a basket of technology assets and also gain exposure to crypto. The fund is primarily non-crypto stocks, however it includes significant holdings in Coinbase, MicroStrategy, and other crypto companies. This ETF is a good way to get into the world of crypto investing without being fully exposed to the volatility of the crypto markets.
2. GlobalX Blockchain ETF [BKCH]
| GlobalX Blockchain ETF | BKCH | $3.99 | $44 Million | 0.50% | -85% | Launched by GlobalX in 2021 | Low expense ratio |
BKCH is an ETF that seeks to track the companies in the Solactive Blockchain Index. These are primarily cryptocurrency companies that include exchanges like Coinbase, payment processors like Block, and Bitcoin mining operations like Riot Blockchain.72% of the fund’s investments are in information technology, and21% are in financials. Close to90% of the fund’s companies operate in North America. At an expense ratio of just 0.50%, BKCH is the least expensive ETF out of the three we cover.
Below is a breakdown of BKCH’s major holdings as a percentage of the entire fund:
- Block Inc - Ordinary Shares - Class A: 17.99%
- Coinbase Global Inc - Ordinary Shares - Class A: 10.69%
- Riot Blockchain Inc: 8.52%
- Marathon Digital Holdings Inc: 8.06%
- Applied Digital Corporation: 5.04%
- Canaan Inc: 5.02%
- Bakkt Holdings Inc - Ordinary Shares: 4.76%
- Core Scientific Inc: 4.34%
- HIVE Blockchain Technologies Ltd: 4.03%
- Galaxy Digital Holdings Ltd: 3.80%
BKCH is a good choice for investors who are ready to dive all-in on crypto. This ETF is a great way to bet on a wide range of companies whose core businesses are blockchain related, and the returns of the fund reflect the broader crypto market. While individual stocks and cryptocurrencies may experience booms and busts related to their specific technologies, the BKCH crypto fund is a great way to track the entire crypto market — rain or shine.
3. Bitwise Crypto Industry Innovators ETF [BITQ]
| Bitwise Crypto Industry Innovators ETF | BITQ | $4.10 | $44 Million | 0.85% | -82% | Launched by Bitwise in 2021 | Strictly crypto companies index |
From Bitwise, one of the largest crypto asset management companies with$1.3 billion in assets under management, comes the Bitwise Crypto Industry Innovators ETF. The fund takes an approach of investing in “picks and shovels” companies that are building the infrastructure which will power blockchain applications in the future. This includes crypto mining companies, brokerages, trading firms, and more. The fund is rebalanced each quarter and allocates 85% of its capital to crypto-native companies and the rest to “diversified businesses with big plans for crypto”.
Here are BITQ’stop 10 holdings as a percentage of the total fund:
- Coinbase: 11.09%
- MicroStrategy: 10.92%
- Silvergate Capital: 9.87%
- Riot Blockchain: 5.34%
- Hut 8 Mining: 4.98%
- Canaan: 4.87%
- Marathon Digital Holdings: 4.75%
- Bakkt Holdings Inc: 4.50%
- Galaxy Digital Holdings: 4.25%
- HIVE Blockchain Technologies: 3.99%
The BITQ ETF is a great choice for investors who are ready to dive headfirst into crypto investing. The fund is fully correlated with the crypto markets and is made up of pure crypto companies and traditional technology companies with major crypto plans for the future. The ETF seeks out infrastructure companies that will enable the blockchain use-cases of the future and it chases high returns in fast-growing crypto startups.
How To Invest In A Crypto ETF
Crypto ETFs are available through most retail brokerages where traditional stocks are traded. Speak to your advisor, or use your brokerage’s online tools to look up the ETF’s ticker symbol and invest in it. If you don’t yet have a brokerage, retail trading platforms such as Robinhood also support these ETFs.
Top Crypto Mutual Funds List
| Bitcoin Strategy ProFund | BTCFX | $10.01 | $22.8 Million | 1.15% | $1,000 | -69% | Launched by ProFunds in 2021 | Going long Bitcoin |
|---|---|---|---|---|---|---|---|---|
| Short Bitcoin Strategy ProFund | BITIX | $24.49 | $800k | 1.35% | $1,000 | N/A (launched in 2022) | Launched by ProFunds in 2022 | Going short Bitcoin |
1. Bitcoin Strategy ProFund [BTCFX]
| Bitcoin Strategy ProFund | BTCFX | $10.01 | $22.8 Million | 1.15% | $1,000 | -69% | Launched by ProFunds in 2021 | Going long Bitcoin |
The two Bitcoin funds from ProFund — the Bitcoin Strategy ProFund and the Short Bitcoin Strategy ProFund — are the only two mutual funds currently available to US investors. Due to stringent regulatory conditions in the US, the approval of new mutual funds has been very slow and investors looking for actively managed mutual funds have very few options. There are, of course, ETF alternatives that are also actively managed.
The Bitcoin Strategy ProFund (BTCFX) is a mutual fund made up entirely of Bitcoin. The fund does not hold actual Bitcoins, however. Instead, it holds Bitcoin futures which are derivative contracts that track the price of Bitcoin but without the hassle of having to actually own the asset. BTCFX has a minimum investment of$1,000 and an expense ratio of1.15% which makes it one of the more expensive funds to own.
BTCFX is a good choice for more advanced traders and institutions looking to get exposure to Bitcoin. The mutual fund is not available on all brokerages, so you must work with a trading firm that supports the fund in order to buy in. Additionally, the $1,000 minimum investment amount and the high expense ratio make this fund hard to justify for those just getting started.
2. Short Bitcoin Strategy ProFund [BITIX]
| Short Bitcoin Strategy ProFund | BITIX | $24.49 | $800k | 1.35% | $1,000 | N/A (launched in 2022) | Launched by ProFunds in 2022 | Going short Bitcoin |
The Short Bitcoin Strategy ProFund is a companion to the Bitcoin Strategy ProFund but it represents a short position on Bitcoin, rather than a long position. This means that this fund goes up in price when Bitcoin goes down. The BITIX fund is a good choice for traders who want to make a bet that Bitcoin will go down in price — whether because that’s their investment thesis, or simply as a hedge for existing long holdings.
The BITIX fund was launched in 2022 so there are no yearly gain metrics for it yet. However, if the crypto market continues its historic 2022 downward slide, an investment in this fund may end up being very profitable. The fund has an expense ratio of1.35% and a minimum investment amount of$1,000. BITIX, like BTCFX, uses futures contracts to make up its positions, so the fund doesn’t actually hold any Bitcoin at any point.
Unlike BTCFX, BITIX is available on retail brokerages such as Robinhood so it’s an easy way to take a short position against Bitcoin without having to use a crypto exchange or trade any actual cryptocurrency. Unfortunately, its $1,000 minimum investment and high expense ratio pose a hurdle for beginners.
How To Invest In A Crypto Mutual Fund
The BTCFX fund is not available on all retail brokerages. You may have to speak with an advisor or sign up for a more sophisticated brokerage in order to get access to the fund. BITIX, on the other hand, is available on platforms such as Robinhood so it’s more accessible to the average trader. It’s important to also keep in mind that both funds have an investment minimum of$1,000 and a relatively high expense ratio.
Top Crypto Trusts
| Grayscale Bitcoin Trust | GBTC | $8.15 | $10.7 Billion | 2% | $50,000 | -66% | Launched by Grayscale in 2013 | Investing in Bitcoin |
|---|---|---|---|---|---|---|---|---|
| Grayscale Ethereum Trust | ETHE | $5.98 | $3.8 Billion | 2.5% | $50,000 | -70% | Launched by Grayscale in 2017 | Investing in Ethereum |
1. Grayscale Bitcoin Trust [GBTC]
| Grayscale Bitcoin Trust | GBTC | $8.15 | $10.7 Billion | 2% | $50,000 | -66% | Launched by Grayscale in 2013 | Investing in Bitcoin |
The Grayscale Bitcoin Trust was launched all the way back in 2013 as a way for investors to get Bitcoin exposure without actually having to own the cryptocurrency. The trust was initially made available to accredited investors and featured high annual fees and minimum investment amounts. Today, the trust can be purchased by non-accredited retail investors through brokerages like Robinhood.
If you’re looking for a way to get exposure to Bitcoin but you don’t want the hassle of keeping custody of your cryptocurrency, the GBTC trust is a good solution. Keep in mind, though, the trust may often trade at a discount or premium to the value of the underlying Bitcoin.
2. Grayscale Ethereum Trust [ETHE]
| Grayscale Ethereum Trust | ETHE | $5.98 | $3.8 Billion | 2.5% | $50,000 | -70% | Launched by Grayscale in 2017 | Investing in Ethereum |
Much like Grayscale’s Bitcoin trust, the ETHE trust gives investors the opportunity to earn from crypto without holding the actual asset. In this case, the cryptocurrency in question is Ethereum — the second largest cryptocurrency after Bitcoin. The ETHE trust has similar features and terms as the GBTC trust, with the major difference being the underlying crypto (ETH rather than BTC) and a slightly larger expense ratio at2.5% rather than the2% offered by GBTC.
Like with GBTC, the ETHE trust is a good option for investors who want to be exposed to cryptocurrency price moves without having to hold the underlying crypto. Ethereum is a robust blockchain protocol that enables the building of blockchain applications, so if you believe in the future of Ethereum, ETHE is a good way to invest.
How To Invest In A Crypto Trust
Investing in crypto trusts can be done through your retail brokerage or by speaking to your advisor. Both GBTC and ETHE are also available through the Robinhood app which can expedite trading for retail investors who are just getting started.
To Sum It Up
Traders looking to get into crypto investing have a wide range of choices beyond simply buying cryptocurrencies. Buying shares in individual crypto companies or shares of funds that commingle the stocks of many companies together are both options for those looking to get crypto exposure.
Most funds are regulated instruments in the US, however, so it’s important to do your reading to understand exactly what you are investing in before putting your capital to work.
Frequently Asked Questions
The best crypto stocks depend on the preferences of the individual trader — you will have to weigh factors such as your risk tolerance, the capital you plan to invest, and the timeline you expect in order to choose the best option.
Blue-chip crypto stock picks, however, include companies like Coinbase and Riot Blockchain.
Income from crypto stock investments in the form of dividends is taxed as income by the IRS. Additionally, if you buy a stock at a low price and sell it for a higher price, you will be liable for capital gains tax which is calculated as a percent of the appreciation of your holdings.
Most retail brokerages should provide you with a set of tax forms at the end of the year which you will use to report your holdings to the IRS.
Income from ETFs in the form of dividends is taxed as income by the IRS. Additionally, if you buy an ETF at a low price and sell it for a higher price, you will be liable for capital gains tax which is calculated as a percent of the appreciation of your holdings.
Most retail brokerages should provide you with a set of tax forms at the end of the year which you will use to report your holdings to the IRS.
Crypto stocks are often more volatile than traditional stocks and are usually correlated with the broader crypto markets (the price of Bitcoin, Ethereum, etc.)
Crypto stocks can be a good investment, however you should be aware of the heightened risk profile of these assets and plan your investment strategy accordingly.
The great thing about crypto stocks and ETFs is that they can be traded right in your retail brokerage alongside traditional stocks and ETFs.
Popular brokerages that offer traditional stocks usually also include a range of crypto stocks and ETFs. The investing app Robinhood is also a good choice for beginner crypto traders.
Yes, there are several cryptocurrency ETFs that have regulatory approval for trading in the US.
Some examples include:
- Amplify Transformational Data Sharing ETF [BLOK]
- GlobalX Blockchain ETF [BKCH]
- Bitwise Crypto Industry Innovators ETF [BITQ]
Our picks for the top cryptocurrency ETFs are:
- Amplify Transformational Data Sharing ETF [BLOK]: Diversified ETF with $400+ million in assets under management which oversees a basket of crypto and non-crypto assets
- GlobalX Blockchain ETF [BKCH]: A middle ground that focuses heavily on crypto companies, but also includes some non-crypto assets
- Bitwise Crypto Industry Innovators ETF [BITQ]: A pure-crypto play made up of only companies that operate in the crypto space
Vanguard currently has a wait-and-see stance on crypto, however they do offer the Grayscale Bitcoin Trust through prospectus only through their brokerage.
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