Top 13 Bitcoin and Ether-Focused Funds to Watch in 2024

Top 13 Bitcoin and Ether-Focused Funds to Watch in 2024: An In-Depth Outline

As the cryptocurrency market continues to evolve and mature, investors are increasingly looking for ways to gain exposure to the top digital assets like Bitcoin (BTC) and Ether (ETH), without having to manage their own portfolios. One popular option is investing in cryptocurrency funds. In this article, we will outline the top 13 Bitcoin and Ether-focused funds to watch in 2024.

Grayscale Bitcoin Trust (GBTC):

Grayscale’s Bitcoin Trust is the largest and most well-known investment vehicle for Bitcoin. Launched in 2013, it holds over 650,000 BTC, making up approximately 3% of the total Bitcoin supply. The trust is traded on OTC markets and has seen significant institutional interest.

ProShares Bitcoin Strategy ETF (BITO):

The ProShares Bitcoin Strategy ETF is the first US-listed bitcoin futures ETF. It began trading in October 2021 and allows investors to gain exposure to Bitcoin through futures contracts listed on US exchanges.

Valkyrie Bitcoin Strategy ETF (BTF):

Another new entrant in the crypto ETF space is Valkyrie’s Bitcoin Strategy ETF. Similar to ProShares, it invests in Bitcoin futures contracts traded on regulated US exchanges.

Ether-Focused Funds:

Grayscale Ethereum Trust (ETHE):

Grayscale’s Ethereum Trust, launched in 2017, holds over 3.5 million ETH. It is the largest and most well-known investment vehicle for Ethereum.

5. CoinShares Ethereum ETCN:

CoinShares’ Ethereum ETCN is an exchange-traded note that provides investors with exposure to the performance of Ethereum. It invests in Ethereum futures contracts and is traded on the NASDAQ.

6. Bitwise Ethereum Strategy ETF (ETHF):

The Bitwise Ethereum Strategy ETF is an actively managed fund that invests in a portfolio of Ethereum futures contracts. It seeks to track the total return of the Bloomberg Ethereum Futures Total Return Index.

Index Funds:

7. Bitwise 10 Crypto Index Fund (BITQ):

The Bitwise 10 Crypto Index Fund provides investors with exposure to the ten largest cryptocurrencies by market capitalization. It includes Bitcoin, Ethereum, and other major coins like Cardano (ADA), Solana (SOL), and Polkadot (DOT).

8. DeFi Pulse Index Fund:

The DeFi Pulse Index Fund tracks the performance of a basket of decentralized finance (DeFi) tokens. It includes popular coins like Uniswap (UNI), Chainlink (LINK), and Aave (AAVE).

Funds with Diversified Portfolios:

9. Fidelity Digital Assets Total Return Index Fund:

Fidelity’s Digital Assets Total Return Index Fund aims to track the performance of a rules-based index of digital assets. It includes a diversified portfolio of Bitcoin, Ethereum, and other major cryptocurrencies.

10. Galaxy Digital Active Fund:

The Galaxy Digital Active Fund is a multi-strategy fund that invests in digital assets. It utilizes both quantitative and fundamental analysis to identify opportunities in the market.

1Pantera Select Fund:

Pantera’s Select Fund is an actively managed fund that invests in a diversified portfolio of digital assets. It seeks to generate returns through a combination of capital appreciation and income from staking.

1Bitwise Crypto Industry Innovators Index Fund (BITQI):

The Bitwise Crypto Industry Innovators Index Fund tracks the performance of a rules-based index of leading cryptocurrency industry innovators. It includes companies like Square (SQ), PayPal (PYPL), and Coinbase Global (COIN).

1Ark Fintech Innovation ETF (ARKQ):

The Ark Fintech Innovation ETF invests in companies that are leveraging technology to disrupt financial services. It includes a number of cryptocurrency-related investments, such as PayPal and Square.

I. Introduction:
Bitcoin (BTC) and Ether (ETH), the two largest cryptocurrencies by market capitalization, have gained significant popularity and importance in the financial world over the past decade.
Brief explanation of the increasing popularity and importance of Bitcoin (BTC) and Ether (ETH):
Bitcoin, as the first decentralized cryptocurrency, has paved the way for a new digital financial system that operates outside traditional financial institutions. With its limited supply of 21 million coins and increasing demand, Bitcoin has become a store of value and a hedge against inflation.
Ether, on the other hand, is the native cryptocurrency of Ethereum, a decentralized platform for building decentralized applications (dApps). Ether’s utility as a fuel for transactions on the Ethereum network, along with its potential role in various DeFi (Decentralized Finance) projects, has led to its growing popularity and adoption.
Importance of investing in Bitcoin and Ether through funds for diversification, ease of access, and professional management:
Investing in Bitcoin and Ether directly can be a complex and risky process. However, investing through funds offers several advantages. Firstly, it provides investors with diversification by allowing them to gain exposure to the broader crypto market rather than just one asset. Secondly, investing in funds offers ease of access as they are often available through traditional investment platforms and can be bought with fiat currency. Lastly, professional management by experienced fund managers reduces the risk associated with investing in volatile crypto markets.

13 Top Bitcoin and Ether-focused funds to consider in 2024

:

1. Grayscale Bitcoin Trust (GBTC): Grayscale’s Bitcoin Trust is the largest and most well-known Bitcoin investment vehicle. It offers investors exposure to Bitcoin through a publicly traded security.
2. Grayscale Ethereum Trust (ETH): Grayscale’s Ethereum Trust offers similar benefits as its Bitcoin counterpart but focuses on Ether.
3. ProShares Bitcoin Strategy ETF (BITO): This is the first US-listed Bitcoin futures ETF, providing investors with a regulated and more traditional way to invest in Bitcoin.
4. VanEck Digital Transformation ETF (DAPP): This ETF offers exposure to companies involved in the digital transformation, with a significant allocation to Bitcoin and Ethereum.
5. Fidelity Digital Assets: Fidelity’s institutional-grade investment platform offers Bitcoin and Ethereum exposure to large investors.
6. BlackRock’s iShares Blockchain/Digital Asset ETF: This ETF, which tracks the performance of companies involved in blockchain technology and digital assets, includes exposure to Bitcoin and Ethereum.
7. Round11 Fund: This is a European crypto investment fund focused on Bitcoin, Ethereum, and other cryptocurrencies.
8. Bitwise 10 Crypto Index Fund: This fund offers investors exposure to the ten largest cryptocurrencies by market capitalization, including Bitcoin and Ethereum.
9. Pantera Capital: Pantera is a cryptocurrency investment firm that offers various crypto funds, including Bitcoin and Ethereum strategies.
10. 3iQ Corp: A Canadian asset manager that offers the Bitwise 10 Crypto Index Fund and other Bitcoin and Ethereum investment products.
11. CoinShares: CoinShares offers a range of digital asset investment products, including Bitcoin and Ethereum tracker funds.
12. Bitwise Asset Management: Bitwise offers a range of crypto investment products, including the Bitwise 10 Crypto Index Fund.
13. CME Bitcoin Futures: Investing in CME’s Bitcoin futures provides investors with a regulated and traditional way to gain exposure to Bitcoin price movements.

Methodology

Criteria for selecting the funds:

When it comes to investing in mutual funds, having a well-thought-out methodology is crucial. One of the essential steps in this process is

selecting the funds

. Several criteria can guide your decision-making:

Investment strategy:

Understanding a fund’s investment strategy is vital, as it determines how the fund manager intends to generate returns. Some strategies focus on value stocks, while others favor growth stocks or a blend of both. Knowing your own investment goals and risk tolerance can help you align your choices with the appropriate fund strategy.

Assets under management (AUM):

The size of a fund’s AUM can influence its effectiveness, as larger funds typically have more resources to allocate efficiently. However, smaller funds may offer unique advantages, such as more personalized attention or lower fees.

Track record:

Examining a fund’s historical performance can provide insight into its consistency and ability to outperform competitors. However, remember that past performance is not an absolute indicator of future success.

Fees:

Understanding the fees associated with a fund is crucial. Expense ratios, management fees, and other costs can significantly impact your returns over time.

5. Reputation:

The reputation of the fund and its manager is another essential factor. A strong track record, positive reviews from industry experts, and a solid organizational backing can provide reassurance and confidence in your investment choice.

Importance of staying informed:

Staying well-informed about the market trends, regulatory changes, and fund performance is a vital part of maintaining a successful investment portfolio. Here’s why:

Market trends:

Keeping up with market trends can help you identify potential investment opportunities and protect your portfolio from risks. This may involve monitoring economic indicators, industry news, and competitor performance.

Regulatory changes:

Understanding regulatory changes can help you adapt to new rules and avoid potential pitfalls. Staying informed about laws, regulations, and guidelines affecting your investments can be a crucial component of a well-executed investment strategy.

Fund performance:

Regularly reviewing your funds’ performance can help ensure that they continue to meet your investment objectives and risk tolerance. By staying informed, you can make informed decisions about whether to maintain or adjust your holdings based on changing market conditions and personal circumstances.

I Top Bitcoin-Focused Funds: The digital currency market has seen a significant surge in the popularity of cryptocurrencies, particularly Bitcoin. With this trend, numerous investment funds have emerged to cater specifically to Bitcoin investors. Here’s a list of some top Bitcoin-focused funds that are making waves in the industry:

Grayscale Investments’ Bitcoin Trust (GBTC)

Grayscale’s Bitcoin Trust is the largest and oldest publicly traded Bitcoin investment vehicle. Launched in 2013, GBTC provides investors with a simple and secure way to gain exposure to the price movement of Bitcoin, without the complexity of buying, storing, and managing cryptocurrencies themselves.

ProShares Bitcoin Strategy ETF (BITO)

Proshares’ BITO is the first U.S.-listed Bitcoin futures ETF, launched in October 202It aims to provide investors with the daily price change of Bitcoin, as measured by the CME Bitcoin Futures Total Return Index, net of expenses.

Valkyrie Bitcoin Strategy ETF (BTF)

Valkyrie’s BTF is another Bitcoin futures ETF that aims to provide investors with investment results that correspond, before fees and expenses, generally to the performance of the MVIS Global Macro Bitcoin Index.

Invesco QQQ Trust (QQQ)

Though not a dedicated Bitcoin fund, QQQ includes companies with significant exposure to Bitcoin. As of Q4 2021, the top holdings in QQQ are Tesla and Microsoft, which have substantial Bitcoin investments.

5. Bitwise 10 Crypto Index Fund (BITW)

Bitwise’s BITW is a passively managed index fund that aims to replicate the performance of the Bitwise 10 Crypto Index, which includes ten of the largest and most liquid cryptocurrencies by market capitalization. Bitcoin currently represents about 63% of the fund’s assets under management.

Grayscale Bitcoin Trust (GBTC):

Description:

Grayscale Bitcoin Trust (GBTC) is the largest and oldest publicly traded Bitcoin investment vehicle in the market. It was established in 2013 and is sponsored by Digital Currency Group (DCG), a leading digital currency investment firm. GBTC offers investors the opportunity to gain exposure to Bitcoin through a traditional investment vehicle, without having to go through the complexities of purchasing and safely storing cryptocurrencies themselves.

Assets under Management:

As of 2024, GBTC boasts an impressive assets under management (AUM) figure, surpassing the $30 billion mark. This significant investment demonstrates institutional-level interest in Bitcoin and underscores its growing legitimacy as a valuable asset class within the financial world.

Strategy:

Grayscale Bitcoin Trust follows a straightforward strategy: it invests directly in Bitcoin, aiming to provide investors with the price action of BTC. GBTC holds its assets in Bitcoin, which are then converted into shares and sold on over-the-counter markets. These shares can be bought and sold through regular investment platforms. This unique approach offers investors a more traditional method for gaining access to Bitcoin’s price movements, making it an attractive option for those who prefer a more conventional investment vehicle.

Fees:

While GBTC’s popularity and convenience come with numerous benefits, it does carry one significant drawback: the high annual expense ratio of around 2%. This fee structure can eat into an investor’s potential returns, making it crucial for potential investors to carefully consider whether GBTC’s ease-of-access justifies the additional cost.

ProShares Bitcoin Strategy ETF (BITO): This

ETF

marks the first

U.S.-listed Bitcoin futures ETF

, providing investors with a unique opportunity to gain exposure to

Bitcoin

through the regulated investment vehicle. BITO is designed to track the price performance of

Bitcoin

futures contracts, specifically those listed on the Chicago Mercantile Exchange (CME). The fund employs a

strategy

that invests in Bitcoin futures contracts, enabling investors to gain leverage on Bitcoin’s price movements without the need for direct ownership of the cryptocurrency.

As of

2024

, this groundbreaking ETF boasts an impressive

assets under management (AUM)

figure, surpassing the $1 billion mark. The fund’s success can be attributed to its innovative approach and investors’ growing appetite for digital asset exposure.

The

fees

associated with BITO are notably lower when compared to other prominent Bitcoin investment vehicles, such as the Grayscale Bitcoin Trust (GBTC). The annual expense ratio for BITO hovers around 0.95%, making it a more cost-effective option for those looking to invest in Bitcoin through an ETF structure.

Valkyrie Bitcoin Strategy ETF (BTF)

Launched in the late 2021,

Valkyrie Bitcoin Strategy ETF (BTF)

is an actively managed Exchange-Traded Fund (ETF) that focuses on Bitcoin futures. This ETF aims to provide investors with the opportunity to gain exposure to Bitcoin through a regulated investment vehicle.

Description:

The Valkyrie Bitcoin Strategy ETF (BTF) is designed to actively manage the price performance of Bitcoin through a rules-based strategy. Unlike other Bitcoin ETFs that aim to replicate the Bitcoin index, this ETF seeks to outperform the price of Bitcoin by using a more aggressive approach.

Assets under management:

Since its inception, the assets under management of

BTF

have been rapidly growing. As of mid-2024, the ETF had surpassed $1 billion in assets, reflecting the increasing interest in Bitcoin and other cryptocurrencies among investors.

Strategy:

The strategy employed by the Valkyrie Bitcoin Strategy ETF (BTF) involves using a combination of quantitative and fundamental analysis to identify opportunities in the Bitcoin futures market. The fund’s managers seek to capitalize on market trends, seasonality, and other factors that may influence the price of Bitcoin.

Fees:

Despite its active management approach,

BTF

offers investors a competitive annual expense ratio of around 0.95%. This fee structure is lower than some other actively managed ETFs, making it an attractive option for investors looking to gain exposure to Bitcoin through a regulated investment vehicle.

Top Ethereum-Focused Funds

In the ever-evolving world of cryptocurrencies, Ethereum has emerged as a strong contender next to Bitcoin. Its unique smart contract functionality has attracted numerous projects and developers, making Ethereum the second-largest cryptocurrency by market capitalization. Investors looking to gain exposure to Ethereum or Ethereum-based projects can consider top Ethereum-focused funds. Here, we highlight some of these funds and their unique features.

Coingeeko‘s Ethereum Investment Funds Ranking

Coingeeko, a leading independent crypto news aggregator, periodically updates its ranking of Ethereum investment funds. This list includes both actively-managed funds and decentralized autonomous organizations (DAOs). Funds like Ethereum Community Fund, Dapp Capital, and Consensys Ventures regularly appear on this list.

Ethereum Community Fund (ETHCF)

ETHCF is a decentralized autonomous organization that aims to support projects building on the Ethereum network. It is community-governed, with its treasury comprised of Ether donations from various contributors. Projects receive funding in exchange for their commitment to contribute to Ethereum’s ecosystem.

Dapp Capital

Dapp Capital, an Ethereum-focused venture fund, invests in early-stage projects that demonstrate high growth potential. The fund’s investment thesis is centered around the belief that decentralized applications (dApps) will disrupt traditional industries, and Ethereum will be at the heart of this disruption. Some of their investments include Uniswap, MakerDAO, and 0x.

Consensys Ventures

Consensys Ventures, a venture capital firm and the investment arm of ConsenSys, is another Ethereum-focused fund. It invests in projects that build on Ethereum’s infrastructure and contribute to its ecosystem. Consensys Ventures boasts a portfolio of over 40 companies, with notable investments in Golem, Ujo Music, and MetaMask.

5. Ethereum ETFs

Although not technically funds, it’s worth mentioning the recent development of Ethereum exchange-traded funds (ETFs). Several asset managers, like Grayscale and CoinShares, have launched Ethereum-focused ETFs that provide investors with indirect exposure to Ethereum through regulated investment vehicles.

Conclusion

These are just a few examples of the top Ethereum-focused funds. Each has its unique approach to investing in Ethereum or Ethereum projects. Whether you’re an active investor or a passive observer, these funds offer valuable insights into the potential growth opportunities of the Ethereum ecosystem.

Grayscale Ethereum Trust (ETHE), the largest and oldest Ethereum investment vehicle, offers investors an indirect exposure to the

ETH

token through its trust. The trust holds ETH tokens as its primary asset, providing investors with the price action of Ethereum without the complexities and risks associated with holding the digital asset directly. As of

2024

, the trust boasts an impressive

over $10 billion

in assets under management.

Strategy: Grayscale Ethereum Trust’s strategy is to invest directly in Ethereum, making it a fully-collateralized investment vehicle. By investing in ETH, the trust aims to provide investors with the price action of the token, allowing them to benefit from its potential growth or decline based on market conditions.

Fees: However, investors should be aware that Grayscale Ethereum Trust comes with a

similar high annual expense ratio

as the popular Bitcoin investment vehicle, Grayscale Bitcoin Trust (GBTC), which hovers around 2%. These fees can eat into investors’ returns, making it essential to consider the long-term implications of these costs before investing in ETHE.

Ethereum Futures ETFs, such as the CBOE Global Markets’ ETH-F, offer investors an opportunity to invest in Ethereum futures contracts that aim to track the price of ETH. Launched after the successful debut of Bitcoin futures ETFs, these Ethereum-focused products allow investors to gain exposure to the popular cryptocurrency through a more traditional investment vehicle.

Description and Functioning

ETH-F, for instance, holds Ethereum futures contracts that are traded on regulated markets. The ETF aims to replicate the daily percentage change in the price of a single Ethereum future contract, which is settled each business day. Investors do not actually own Ethereum but instead own shares of the ETF that represent their proportional ownership in the trust.

Assets Under Management

The assets under management (AUM) for specific Ethereum futures ETFs can vary significantly based on market conditions. For example, if the demand for Ethereum-backed investment products rises and more investors pour their funds into these ETFs, then the AUM will increase accordingly. In 2024, we may observe substantial growth in the AUM of Ethereum futures ETFs as more institutional investors look to diversify their portfolios with digital assets.

Fees and Expenses

Like other ETFs, Ethereum futures ETFs come with an annual expense ratio. The fee structure can range from approximately 0.5% to 1%, depending on the specific ETF. Investors need to factor these fees into their investment decisions to determine the net return they can expect from their investment in Ethereum futures ETFs. Despite these costs, many investors may prefer the convenience and regulatory benefits that come with investing in an ETF versus directly purchasing and holding Ethereum or other cryptocurrencies.

Ethereum-focused active ETFs: These are actively managed funds that invest in Ethereum-related stocks and projects, providing indirect exposure to the cryptocurrency for investors. Ethereum-focused ETFs aim to outperform the broader market by selecting specific stocks and projects that show potential in the Ethereum ecosystem.

Description:

Ethereum-focused active ETFs are designed to offer investors a way to gain exposure to the Ethereum ecosystem without directly purchasing and holding the cryptocurrency itself. These funds invest in companies that are working on Ethereum-related technologies, such as decentralized finance (DeFi), non-fungible tokens (NFTs), and other blockchain applications. By investing in these stocks, ETF investors can potentially benefit from the growth of Ethereum and the wider crypto market.

Assets under management:

The assets under management (AUM) for Ethereum-focused active ETFs vary based on the specific fund and market conditions in 2024. Some funds may have large AUM due to strong investor demand, while others may have smaller AUM if the market is less favorable towards Ethereum-related stocks.

Fees:

Investors in Ethereum-focused active ETFs pay annual expense ratios ranging from approximately 0.5% to 1%, depending on the fund’s investment strategy. These fees are used to cover the costs of managing the fund, including research, administration, and marketing expenses. While these fees can eat into an investor’s returns, they may be worth it for those who want to gain exposure to the Ethereum ecosystem through actively managed funds.

Additional Considerations and Conclusion

When it comes to investing in Bitcoin and Ether-focused funds, there are several additional considerations that investors should keep in mind.

Regularly assessing your investment goals, risk tolerance, and time horizon when choosing a fund

Just as with any other investment, it’s crucial to assess your investment goals, risk tolerance, and time horizon before selecting a Bitcoin or Ether fund. These factors will help determine which type of fund best aligns with your investment strategy and risk appetite.

Keeping up to date with industry developments, regulatory changes, and technological advancements affecting Bitcoin and Ether

The digital asset market is known for its rapid pace of innovation and change. As an investor, it’s essential to stay informed about industry developments, regulatory changes, and technological advancements that could impact your investment.

Understanding the risks associated with investing in cryptocurrency funds and seeking professional advice when necessary

Investing in Bitcoin or Ether-focused funds comes with unique risks, including market volatility and regulatory uncertainty. It’s crucial to understand these risks and seek professional advice when necessary.

Conclusion:

By exploring the top 13 Bitcoin and Ether-focused funds, investors can gain a better understanding of the options available to them in the rapidly evolving digital asset market. Each fund offers distinct advantages and considerations, making it essential to carefully evaluate each one based on your individual investment goals, risk tolerance, and time horizon.

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