The last few months have been a turbulent time for cryptocurrencies. But that hasn't deterred the relatively nascent industry from continuing to innovate.
Since the ProShares Bitcoin Strategy ETFs launched in October 2021, a flurry of new funds has hit the market. The SEC has been reluctant to approve Bitcoin ETFs,
Since the ProShares Bitcoin Strategy ETFs launched in October 2021, a flurry of new funds has hit the market. Prior to that, the SEC had been reluctant to approve Bitcoin ETFs, which were a long time coming.
As far back as 2013, the Winklevoss twins, the founders of the Gemini cryptocurrency exchange, looked to start a Bitcoin ETF, but they weren't successful at the time.
A Crypto ETF? What Is That?
An ETF that invests in cryptocurrencies is known as a cryptocurrency exchange-traded fund (ETF). A cryptocurrency ETF measures the price of one or more digital tokens, akin to conventional ETFs that track an index or a basket of assets, and its share price changes based on investor sales and purchases, just like with conventional ETFs.
Investing in a cryptocurrency ETF allows investors to diversify their risk in crypto holdings, rather than assume a concentrated risk by going "all in" with one individual crypto investment. The fortunes of crypto ETFs are linked to the success of key cryptocurrencies such as Bitcoin and Ethereum.
ETFs in the crypto space is a buzzy, exciting new technology. In an industry notorious for the volatility and risk involved in investing in cryptocurrencies, EFTs are a less risky way to gain exposure to digital assets. And in the case of the newly launched
What Are The Best Crypto ETFs?
The most significant advantage of bitcoin ETFs is that they provide exposure to cryptocurrencies without the added cost of ownership.
Cryptocurrency ownership comes with a slew of additional costs. Custody fees, for example, are connected with cryptocurrency. An annual fee is also charged by secure digital wallets for storing purchased cryptocurrencies.
Here are some of the best crypto EFTs, which get around these fees.
- The ProShares Bitcoin Strategy ETF (BITO):
This ETF began trading in October 2021 as the first Bitcoin ETF in the United States. This ETF allows investors to gain exposure to Bitcoin without having to own the cryptocurrency directly. BITO does not invest in Bitcoin directly.
The fund's goal is to provide returns by investing in Bitcoin futures contracts. BITO could be used as a substitute for actual assets such as gold and other commodities, as an alternative to regular currency investments, or as an inflation hedge. BITO has $1 billion in net assets and a 0.95% expense ratio, meaning that every $10,000 invested cost $95 per year.
- Valkyrie Bitcoin Strategy ETF (BTF):
Three days after ProShares' Bitcoin futures ETF went public, the Valkyrie Bitcoin Strategy ETF launched.
Valkyrie, a Tennessee-based alternative asset manager with years of experience in both traditional and digital asset management, already has trusted for Bitcoin, Polkadot, Algorand, and other cryptocurrencies, but BTF is the company's first cryptocurrency ETF.
However, despite BITO’s instant success, the actively managed BTF has only a fraction of the assets under its belt.
- The Grayscale Bitcoin Trust (GBTC):
This is one of the first investment vehicles that derives its value purely from Bitcoin's price. Since its inception in 2013, the fund has returned over 28,000% to investors. GBTC manages $28 billion in assets, making it one of the largest crypto funds on the market. Its benchmark is the CoinDesk Bitcoin Price Index (XBX).
Accredited investors with a minimum investment of $50,000 can invest directly in the trust, but anybody can buy shares in GBTC on the secondary market through several online brokers. Miscellaneous expenses outside of the fund's annual expense ratio of 2% may also be incurred.
- Tetraguard (TETRA):
Tetraguard stands out as the first decentralized ETF in the crypto space. It offers investors easy access to the most popular cryptocurrencies in a token basket, is backed by the liquidity of an Automated Market Maker (AMM), and affords the opportunity to get in on the ground floor, with bonus fee tokens (QUAD) awarded to early investors.
This ETF requires no government oversight or bureaucracy to operate. Investors can easily do swaps and exchanges on the platform while holding a diversified basket of the most popular cryptos. The sweet spot is that investors earn a fee while holding these coins.
What is Tetraguard?
Tetraguard is a network built on the Ethereum blockchain that is "100% run by TETRA's audited smart contracts." This means that no central authority has access to your or anybody else's money. They're all encased in the smart contract, which includes an automatic market maker and specific instructions on dividing the proceeds. Tokens are burned when users choose to discontinue their Tetraguard experience,
Wrapped BTC, wrapped ETH, gold hedged stability via PAXG, and the system's QUAD reserve token make up the protocol. The protocol's QUAD token, which gathers staked ETH returns and transaction fees, distributes a decentralized dividend to TETRA token holders.
The TETRA is a decentralized smart contract that trades within its own decentralized mechanism, producing transaction fees and staked ETH split on a pro-rata basis with all TETRA holders via its own fee-sharing token, the QUAD, through its own internal algorithm depending on the reserves per token.
Should You Invest In Tetraguard?
When compared to the other ETFs in the crypto market, Tetraguard stands out as the only ETF that follows the basic principles of cryptocurrencies. It's decentralized (all assets are stored on the Ethereum blockchain and not controlled by any third party) and secured (Consensys tested and checked), censorship-resistant.
This ETF advances the cause of DeFi by offering investors a token basket comprised of the most popular cryptocurrencies, with shares returned from staked tokens to its holders. With Tetraguard, there's no need to buy Bitcoin and Ethereum separately. A token basket where they are all wrapped together with the lowest transaction fees and a reward token built-in.
Is this the best crypto ETF? Well, if you consider what Tetraguard offers, it seems to be a no-brainer to invest in crypto in any other way. But personal research is still advised.
DISCLAIMER: This is not a solicitation to buy or sell, SmartBlocks is a token holder of the Quad token, and Mark Fidelman is a control individual of SmartBlocks, and as such that entity and individual may benefit from any price appreciation, as well as any known or unknown affiliates at this time.