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Highlights
- The global crypto market has over 17,500 cryptocurrencies and over 450 exchanges.
- Its market capitalization has grown from US$18.5 billion on Feb 11, 2017, to US$1.97 trillion on Feb 10, 2022.
- ProShares’ Bitcoin Strategy ‘BITO’ is the first crypto ETF launched in the US.
The global crypto market has grown leaps and bounds, from US$18.5 billion on February 11, 2017, to US$1.97 trillion on February 10, 2022. Currently, it has around 17,500 cryptocurrencies and more than 450 cryptocurrency exchanges globally, as per coinmarketcap.com.
The gains in the crypto market accelerated over the past two years. The momentum is likely to continue with the advent of new technology and innovation like web3, metaverse, and NFTs.
The growing interest in cryptos and blockchain will speed up growth.
On October 19, 2021, ProShares Bitcoin Strategy became the first crypto ETF to debut in the US stock market after the nod from the US Securities and Exchange Commission.
The ETF trades under the ticker BITO and tracks bitcoin prices through futures contracts traded at the Chicago Mercantile Exchange (CME).
The US traded crypto ETFs has an average expense ratio of US$0.80, as per ETF.com.
We discuss the top three crypto-ETFs based on their AUM (asset under management).
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ProShares Bitcoin Strategy ETF (BITO)
BITO, the first crypto ETF in the US, manages the front-month CME bitcoin futures portfolio. Founded on October 19, 2021, the open-ended fund has an average daily trading volume of US$197.69 million. The ETF’s asset under management is US$1.16 billion.
BITO does not invest directly in bitcoin but in bitcoin futures on the CME commodity exchange. Its expense ratio is 0.95%. The top 10 holdings include the US dollar, futures, and the US treasury bills. The ETF closed at US$27.74 on February 10, 2022.
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Valkyrie Bitcoin Strategy ETF (BTF)
The Valkyrie Bitcoin ETF was launched on October 22, 2021. It is an open-ended fund like BITO and has approximately US$43.17 million in assets under management.
The BTF portfolio includes Chicago Mercantile Exchange bitcoin futures, corporate bonds, cash, treasuries. It does not invest directly in bitcoin and doesn’t track any index.
BTF’s expense ratio is 0.95, and its daily average trading volume is US$12.98 million. Its top 10 holdings include mutual funds and treasury bills. BTF closed at US$17.21 on February 10, 2022.
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VanEck Bitcoin Strategy ETF (XBTF)
Like the other two ETFs, XBTF doesn’t invest directly in cryptocurrency. It invests in front-month bitcoin futures contracts. Launched on November 15, 2021, this open-ended fund has US$28.34 million worth of assets under management.
Its average daily trading volume is US$1.41 million. XBTF has a lower expense ratio than the other two at 0.65%.
The expense ratio is critical because higher expenses may lead to less profit. Its top 10 holdings are in US dollar and treasury bills. The ETF closed at US$43.48 on February 10, 2022.
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From BITO to BTF: Top crypto ETFs to watch in 2022
Bottomline
ETFs are one of the easiest ways to get exposure to diverse crypto assets. It is relatively safer than direct investment due to the market’s high volatility. The digital currency market is still evolving. Hence, investors should apply due diligence before entering the crypto market.
