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Best Crypto ETFs To Buy in 2021

Exchange-traded funds (ETFs) are open-ended funds that trade on the secondary market, which means you can buy them via an online broker. ETFs provide a cheap way for the retail trader to gain exposure to a wide range of companies in a specific sector.

The crypto market capitalization recently exceeded $1 trillion, and the frenzy in Bitcoin and other cryptocurrencies — as well as the increased adoption of blockchain technology in general — provides a strong incentive for investors to gain exposure to the industry. We have therefore identified the best crypto ETFs to trade in 2021. 

Where Can I Trade Crypto ETFs?

Trading an open-ended fund like an ETF means that the fund goes through a brokerage house, but not all brokers let you trade ETFs, so we’ve found the best ones that do.

1
Min. Deposit
$50
Exclusive promotion
User Score
10
Trade/invest in stocks with just $50
Invest for dividends and get payout on stocks on Ex-Dividend day
Over 11 payment methods, including PayPal
Start Trading
Pros:
Trade/invest in stocks with just $50
Invest for dividends and get payout on stocks on Ex-Dividend day
Over 11 payment methods, including PayPal
Payment Methods
Bank Transfer, Wire Transfer
Full regulations list:
CySEC, FCA
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
2
Min. Deposit
$1
Exclusive promotion
User Score
9.3
0 Commissions and no deposit minimums
Registered with and regulated by SEC and FINRA
Loss of cash protection
Start Trading
Pros:
0 Commissions and no deposit minimums
Registered with and regulated by SEC and FINRA
Loss of cash protection
Payment Methods
Full regulations list:

What is a Crypto ETF?

A crypto ETF is a pooled investment in companies that are active in the crypto universe. These companies may be involved in mining cryptocurrencies, providing services on the blockchain, or anything relating to digital assets. By owning an ETF, you get some diversified exposure to the industry.

Invest in Crypto ETFs in 3 Steps

1

Open a Trading Account

Open a trading account with a brokerage house, such as one of the brokers we have listed. Whatever broker you choose, make sure it is a regulated broker that offers ETF trading.

2

Choose Your Crypto ETFs

Choose the crypto ETFs to trade from the list provided on your broker’s online platform or mobile app.

3

Place Your Trade

Select the ETF you want, enter your investment amount or stake size (for a CFD or spread bet), and press the “buy” button, but beware of any leverage or “margin” that might mean that any losses will be amplified.

Best Crypto ETFs to buy now

According to our research, the top four cryptocurrency ETFs to buy in 2021 (based on their exposure to blockchain technology and some other metrics such as the price/book ratio) are: 

  1. Capital Link Global Fintech Leaders ETF (KOIN)
  2. First Trust Indxx Innovative Transaction & Process ETF (LEGR)
  3. Siren Nasdaq NexGen Economy ETF (BLCN)
  4. Amplify Transformational Data Sharing ETF (BLOK)

1. KOIN

KOIN is an interesting ETF not only because it tracks companies with an economic interest in blockchain technology, but also because it picks the constituents using artificial intelligence (AI). This ETF classifies the companies it tracks into various categories: cryptocurrency users and payees, solution providers, and mining enablers.

Here are some key facts for this ETF at the time of writing:

  • Number of holdings: 45
  • Top holdings: Baidu, NVIDIA, Visa
  • Average daily volume: $503k
  • Securities lending allowed

2. LEGR

The LEGR ETF provides exposure to global equities with an interest in blockchain technology. LEGR is an equally-priced index that is rebalanced and reconstituted twice a year. 

Here are some key facts for this ETF at the time of writing:

  • Assets-under-management (AUM) $61.24 million 
  • Price/book ratio 1.51 
  • YTD return 4.44% 
  • Baidu, Micron, PayPal among the largest holdings 
  • Over 30% of the constituents are from the United States 
  • Other representative countries include Spain, India, France, Switzerland

3. BLCN

BLCN was one of the first ETFs of its kind: an ETF that invests in companies that use, research, and develop blockchain technologies. This fund’s index committee has interesting criteria for selecting the companies to invest in; it uses a combination of factors, such as material resources.

Here are some key facts for this ETF  at the time of writing:

  • More than half the constituents are from the United States 
  • Over $200 million in AUM 
  • Other representative countries include the United Kingdom, Germany, Canada, China, Japan 
  • $3.84 million average daily volume 
  • Galaxy Digital, Baidu, Square are some of its largest holdings 
  • Price/book ratio 2.37%
  • Dividend yield 1.57%

4. BLOK

BLOK is one of the most popular crypto ETFs for one simple reason: its holdings include global equities that focus on blockchain technology, hence the name “BLOK”. This ETF’s investments are split into two main categories; one has direct exposure to companies deriving their revenues from the blockchain technology, and the other invests in companies that invest in the former. The ratio between the two categories is roughly 70:30.

Here are some key facts for this ETF at the time of writing:

  • An open-ended fund with over $640 million AUM 
  • Average daily volume exceeds $18 million
  • 23% YTD return  
  • Almost half of the companies are from the United States 
  • Other representative countries include Japan, Canada, Germany, the United Kingdom
  • MicroStrategy, Silvergate, and Marathon Patent are some of the bigger holdings 
  • Price/book ratio 5.33%
  • Dividend yield 0.67%

Expert Tip on Investing in Crypto ETFs

The cryptocurrency market is extremely volatile. For example, Bitcoin, the leading cryptocurrency with the largest market capitalization, declined over 30% in less than two weeks during January of this year. It bounced back and made new all-time highs, but the point here is that with increased volatility comes increased risks. The best way to invest in crypto ETFs is to wait for the main cryptocurrencies to reach strong dynamic and support levels.
- Mircea Vasiu

Why Trade Crypto ETFs?

The cryptocurrency market is highly unregulated, so it's risky to own cryptocurrencies directly. Going through cryptocurrency exchanges is a costly process and ETFs offer a cheaper alternative. A crypto ETF provides exposure to the cryptocurrency market by investing directly in companies involved in various stages of blockchain developments, projects, applications, and solutions. Put simply, a crypto ETF offers a cheaper and more diversified alternative to get exposure to the cryptocurrency market.

Frequently Asked Questions

  1. BLOK. The number of constituents and the assets-under-management (AUM) makes BLOK very popular among investors. Its largest holding is MicroStrategy, a company that invested its treasury into Bitcoin in the middle of 2020 when Bitcoin traded well below the $10,000 level.

  2. The cryptocurrency market grows in popularity by the day. Bitcoin and other major cryptocurrencies have reached all-time highs, rising over four times in value in recent months. It means that the adoption rate, both among retail traders and institutional investors, is increasing.

  3. An ETF is a cheap way to gain exposure to companies involved in everything crypto-related. From blockchain projects to Bitcoin mining, ETFs gather various names in the industry and include them in a fund whose shares are traded like any other shares. Traders wanting to get exposure to the crypto industry will diversify more if owning an ETF rather than any individual company.

  4. ETFs are pooled investments that act as an open-ended fund. They issue shares and redeem them during the same day and are traded in the secondary market via brokers. Their price is derived from the Net Asset Value (NAV) of the companies in the portfolio. Common or ordinary shares belong to one single company, have voting rights, and enable their holder to receive a dividend if the company decides to pay one.

  5. ETFs are especially good for beginners. Just by owning an ETF, one gathers big names in the industry under a single trade. However, ETFs are known to be more volatile than the underlying common shares, depending on the way they track the cryptocurrency market.

  6. The cryptocurrency market is expected to grow by a staggering 60% in the next five years in terms of Compounded Annual Growth Rate (CAGR). Few or no industries achieve such rates, and the easiest way to calculate the size of the industry is to look at the rising market capitalization – roughly $1 trillion.

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