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Best cryptocurrency ETFs to buy in 2021
Our experts have been through the markets in order to pick out their favourite cryptocurrency ETFs and you can find them ranked on this page. We also go over the pros and cons of investing in a fund like this and show you where to do so.
What are the top crypto ETFs to buy?
The table below includes our experts’ choices for the best ETFs to get this year. Crypto ETFs can vary quite dramatically in terms of what they offer, so this represents a selection of the options available. You can scroll down to find more information about each one.
|#||ETF symbol||ETF name|
|1||KEYS||21Shares Bitwise Select 10 ETP|
|2||HODL||21Shares Crypto Basket Index ETP|
|3||BTCC||Purpose Bitcoin ETF|
|4||QBTC11||QR Capital Bitcoin ETF|
|5||BITQ||Bitwise Crypto Industry Innovators ETF|
1. 21Shares Bitwise Select 10 ETP (SW: KEYS)
21Shares runs a number of different cryptocurrency ETPs (exchange-traded products is an umbrella term that refers to funds that trade on a stock exchange, such as ETFs), ranging from funds that track individual coins to ones that own a collection of different ones.
This particular fund owns ten of the largest cryptocurrencies by market capitalisation, so it provides one of the most diverse options on the market. It rebalances the portfolio every month, which means that it adjusts the coins it holds based on any changes in the market, so it’s the best way to get access to the top cryptocurrencies.
Like many of the crypto ETFs on this list, it’s still heavily weighted in favour of Bitcoin and Ethereum – the two make up 90% of its holdings – but it gives you exposure to the likes of Litecoin and Cardano as well.
2. 21Shares Crypto Basket Index ETP (SW: HODL)
The second 21Shares offering is a unique one that owns five of the largest cryptocurrencies based on its projections of what the market will look like in 2050. That obviously makes it more of a gamble, because not only are you relying on a volatile cryptocurrency market but also that the projections are accurate.
However, it’s one of the more interesting funds available, because it’s trying to predict the future rather than relying on the biggest coins right now. While Bitcoin is the largest holding, it’s not as dominant a part of this fund as it is in some of the others on this list. It makes up about 40% of the total, while Ethereum and Polkadot each account for 20%.
There is a limited price history to go on for all of these ETFs, and this one is no different. It has only been in operation since Spring 2021, and its price has been quite up and down ever since then. You should expect that from any crypto ETF as it’s simply the nature of the market, but this fund allows you to overlook that in favour of a more long term approach.
3. Purpose Bitcoin ETF (TSE: BTCC)
The Purpose Bitcoin ETF was the world’s first Bitcoin ETF and it’s one of the best ways to own the cryptocurrency without needing to get your own wallet or use a specialist exchange. Instead, the ETF trades just like a normal stock and its price rises and falls just like the coin itself does.
Bitcoin makes up 100% of the holdings, so it’s much more volatile than a normal fund, which creates stability by owning a diverse range of assets. This fund is completely reliant on Bitcoin’s performance, but that’s also its main attraction as ETFs are much more regulated and easy to use than the cryptocurrency market.
It’s also true that a share in the Bitcoin ETF is available for just a few dollars. Although the price of that share will change dramatically over time – it’s not unusual for Bitcoin to rise or fall by more than 10% in a day – it allows you to profit from an increase without committing a substantial amount of money.
4. QR Capital Bitcoin ETF (BVMF: QBTC11)
The QR Capital fund operates in much the same way as the Purpose ETF: it owns Bitcoin and the price of the ETF fluctuates in relation to the value of the cryptocurrency. It’s the first Bitcoin ETF to be available in South America and it trades on the Brazilian stock exchange.
This is one of the newest funds on this list, having only begun trading in June 2021, but it offers another secure way to own Bitcoin. By owning it though a stock exchange rather than buying coins yourself, you avoid the need to create a wallet or pay blockchain fees, and you can easily sell your shares if you want to cash in your investment.
5. Bitwise Crypto Industry Innovators ETF (NYSEARCA: BITQ)
The Bitwise Industry Innovators ETF is different to the others on this list in that it owns shares in companies that are invested in cryptocurrency, rather than the coins themselves. It’s much more like a traditional ETF, that simply tracks the performance of the crypto industry.
The companies it owns are all involved in the crypto economy, and many of them develop the technology to help it grow. It’s more diverse than funds that are heavily exposed to a single coin – the largest holding in the Bitwise fund makes up just 10% of the total – and it owns stocks in companies that are often quite different from one another.
Its largest holding is Microstrategy, a software company, and the second largest is the crypto exchange Coinbase. It also owns companies that work in app development and cryptocurrency mining, so it isn’t reliant on the coin market alone to grow.
Where to buy the best crypto ETFs
In order to buy an ETF you need an online broker. Ideally, one that allows you to buy stocks from lots of countries around the world as many of these funds trade outside of the US and UK. The table below includes brokers that allow you to do just that.
What is a cryptocurrency ETF?
It’s a fund that trades on the stock market, known as an ‘exchange-traded fund’, that owns assets that are part of the cryptocurrency world. In many cases, that means they own the coins themselves, but it can also mean that they hold stocks in companies with exposure to the crypto market. So the price of these funds reflects the performance of cryptocurrency in general.
Are crypto ETFs a good investment?
It depends on what’s important to you as an investor, because they can be more risky and volatile than is normal for ETFs. This type of fund is usually a low-risk, low-maintenance way to build an investment portfolio, whereas crypto ETFs are more like a way to invest in cryptocurrency in a more regulated way, rather than owning the coins yourself.
However, they are a good way to get exposure to cryptocurrency if you’d rather not go through the process of buying coins and storing them. ETFs are extremely easy to access and take the difficulties of picking which coin you expect to perform best out of your hands.
It’s likely that more of these funds will crop up as time goes by, and each one will offer new ways to invest in the crypto market. Keep your eye on the latest news if you want to bide your time, or sign up to a broker straight away in order to get started now.
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Fact-checking & references
Our editors fact-check all content to ensure compliance with our strict editorial policy. The information in this article is supported by the following reliable sources.
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