Cryptocurrencies are one of the most dynamic digital assets available in the market. Investors often shy away from crypto assets owing to their high-risk profile and technical complexities. However, this asset class is attractive due to its potential to deliver higher returns. Investors who want to gain exposure to this lucrative asset can consider crypto ETFs that offer a much simpler way to diversify your portfolio. We used TipRanks’ ETFs Comparison tool to compare Grayscale Bitcoin Trust (GBTC), 2x Bitcoin Strategy ETF (BITX), and Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP) to pick the most attractive crypto ETF based on their performance.
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Crypto ETFs can be of two types: one that tracks the direct spot prices of the underlying cryptocurrency while the other that tracks crypto futures contracts and ETPs (exchange-traded products).
The TipRanks Compare ETF tool enables the comparison of ETFs based on several parameters, including AUM (assets under management), funds flow, expense ratio, technicals, and performance over different time periods.
Grayscale Bitcoin Trust ETF (GBTC)
Established in September 2013, the Grayscale Bitcoin Trust is the oldest and largest publicly traded Bitcoin (BTC-USD) fund. In 2015, Grayscale became publicly quoted under the symbol “GBTC.” In 2024, GBTC started trading as a spot Bitcoin ETF on the NYSE Arca. It is an actively managed fund that tracks the spot prices of Bitcoin.
As of June 27, GBTC had an AUM (assets under management) of $16.93 billion. Meanwhile, its expense ratio stands a little higher at 1.50%. In the past three months, GBTC witnessed net outflows of $4.68 billion.
2x Bitcoin Strategy ETF (BITX)
The 2x Bitcoin Strategy ETF is a leveraged ETF linked to the underlying performance of Bitcoin. The BITX seeks to amplify (two times) the daily returns (before fees and expenses) of the benchmark index, S&P CME Bitcoin Futures Daily Roll Index. The benchmark index, in turn, measures the performance of the CME Bitcoin Futures market and rebalances daily.
Investing in leveraged ETFs has added risk compared to conventional ETFs. The 2x exposure implies that both gains and losses could be magnified twice as much. Notably, BITX has the highest expense ratio of 1.85%, because the fund manager strives to double the returns of the fund on a daily basis by holding derivative instruments.
As of June 27, BITX had an AUM of $1.39 billion. The fund also pays monthly dividends of $0.86 per unit, reflecting a current yield of 5.46%. BITX witnessed net inflows of $545 million in the past three months.
Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP)
The Bitwise Bitcoin and Ether Equal Weight Strategy ETF provides directional exposure to two of the largest cryptocurrencies, Bitcoin and Ethereum (ETH-USD). The fund invests equally in regulated CME futures contracts for each asset, thus giving the benefits of both digital assets. The fund’s thesis for investing equally in both cryptocurrencies is that both Bitcoin and Ethereum possess unique features and carry massive growth potential.
BTOP has a very small AUM compared to the other two, standing at $9.49 million, while the expense ratio is 0.90%. BTOP was created in September 2023. It is expected to follow an annual dividend policy. Accordingly, BTOP paid an annual dividend of $1.99 per unit on December 28, reflecting a yield of 4.19%. BTOP saw net inflows of $3 million in the past three months.
Ending Thoughts
Based on the year-to-date and past one-year performance, the Grayscale Bitcoin Trust ETF is the most attractive pick currently. GBTC is also the oldest and largest ETF and has generated solid returns since its inception.
