The costs associated with rolling over the contracts may account for some of the differences between the performance of the ETFs and their underlying cryptocurrencies. ProShares also offers an ether futures ETF like the one it offers for bitcoin. After ProShares entered the crypto ETF market, VanEck followed closely behind, launching the VanEck Bitcoin Strategy ETF in November 2021. In addition to investing in CME bitcoin futures contracts, this ETF holds U.S.

This means more risk for you, which can be even more worrying if you are more accustomed to the lower volatility of more typical ETFs. No direct ownership or control over underlying cryptocurrency. While crypto ETFs do bring convenience, you won’t have control or access to the cryptocurrency itself, and the decentralization and anonymity associated with crypto don’t apply to ETF shareholders. Investors in crypto ETFs are not the owners of the digital assets. In addition to allocating funds to futures ETFs or awaiting the possible approval of spot ETFs, investors can put their money into several other ETF-like products for crypto exposure.

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Square Inc. are also publicly listed companies with bitcoin on their balance sheets. Is It a Good Idea to Invest in a Crypto ETF? However, because prices vary so much, there is more risk involved in crypto ETFs. If you’re considering adding a crypto ETF to your portfolio, speaking with a financial advisor about your specific circumstances and goals is always the prudent choice. Crypto ETFs are designed to mimic the assets so investors can gain exposure to significant price fluctuations. For example, the Amplify Transformational Data Sharing ETF (BLOK) holds a portfolio of companies that develop and use blockchain technologies. Plenty of ETFs offer diversified exposure to companies that engage with blockchain technology or crypto companies.

How Do the Taxes Compare for Crypto ETFs. Can I Short Crypto ETFs? There are a few cryptocurrency index funds, such as the Bitwise 10 or Galaxy Crypto Index Fund. Consult a tax advisor about your specific circumstances is always prudent in cases like this. These funds are only available to non-U.S. The tax implications for crypto ETFs often differ from directly holding cryptocurrency. Is There a Crypto Index Fund? In many jurisdictions, crypto ETF gains are treated like capital gains, which can be more favorable than the tax treatment for direct cryptocurrency transactions.