Crypto ETFs have become the topic of the hottest discussions this year. These exchange-traded funds have become a luring investment opportunity for people looking for passive income. However, options remain limited when choosing the best cryptocurrency ETFs to invest in 2024. Most crypto ETFs are still based on futures contracts or offer exposure to companies that own cryptocurrency, making it challenging to pick the best investment opportunity. However, we'll help you decide what crypto to invest in by considering the following list of new crypto ETFs in 2024. Let's dive in! 

ETF Crypto Meaning

What are ETFs in crypto? ETFs (exchange-traded funds) are investment funds that track crypto prices individually or in a group. Like regular ETFs, crypto ETFs are traded daily, and their cost can vary based on daily sales and investments. 

Crypto ETFs track crypto's price performance by investing in a portfolio linked to their instruments. They trade on regular exchanges, letting investors hold them in their brokerage accounts. 

Investing in crypto ETFs should be a better choice for people who want to benefit from the growth of the digital currency market but want to avoid the hassles associated with owning cryptocurrency. 

Besides, crypto ETFs should be the right investment option for new investors who do not fully understand crypto markets and all the ins and outs of possessing digital currency. Crypto ETFs let investors diversify their funds across multiple cryptos.

Crypto ETFs' Benefits and Risks

Like any investment, especially the one dealing with cryptocurrency, ETFs also come with specific opportunities and considerations you should know about. Understanding the pros and cons ensures you select the assets that meet your financial goals and match your risk profile. 

Opportunities:

• Cryptocurrency ETFs involve less hassle than storing actual cryptos. 
• Unlike directly holding cryptocurrency, investing in ETFs requires no wallet usage. If you do not need a wallet, you do not need to worry about losing access to your wallet either.
• Investing in ETFs that span multiple cryptos diversifies your portfolio.
• There is no need to invest in crypto exchanges that are less regulated than an asset manager offering ETF. 

Considerations:

• Investing in ETFs may involve administration fees.
• You do not possess actual ownership of the cryptocurrency. 
• There may be an inaccurate reflection of actual crypto prices. 

When considering crypto ETFs as an investment opportunity, keep in mind other ways of investing in crypto markets, like companies offering crypto products or services or businesses producing hardware for the crypto industry. 

Crypto Pre-sales vs Crypto ETFs

While there are many reasons why investing in crypto ETFs is a good decision, it's also worth pointing out that ETFs are not the best choice for investors looking for impressive monetisation opportunities for the short term. When investing in crypto ETFs, you should be ready for a long-term investment approach. If you are more interested in short-term gains, you should consider investing in crypto pre-sales. 

As the name suggests, crypto pre-sales let investors buy new digital assets at a discounted price (which can reach up to 50%) before the asset officially launches in public. After the assets are publicly listed on exchanges, investors can sell them for profit. However, it's also worth noting that investing in crypto pre-sales also involves certain risks since you put funds in new assets to the market, and you do not know how they will perform in the future. Investors should do their own research and due diligence when investing in pre-sale crypto assets.

Blockchain ETFs vs Crypto ETFs

Like regular ETFs, blockchain ETFs invest in companies with blockchain technology operations. A broader blockchain technology has many applications outside of crypto, meaning blockchain ETF investments can go beyond crypto ETFs. 

You should be aware of certain risks involved in investing in blockchain ETFs. The technology is still new, and many companies associated with investment opportunities are startups that have not been established well enough. Still, if you are looking for ways to diversify your investment portfolio without taking the risk of owning tech stocks, blockchain ETFs should be a good choice. 

Crypto ETFs are available for purchase through traditional ETF brokerages. These are the optimal choices for people looking for solutions to diversify their investment opportunities but lack profound knowledge of cryptocurrency. Crypto ETFs were invented as an alternative option to invest in crypto markets when the latter started scaling. 

How Do ETFs Work?

Unlike traditional ETFs, which replicate how indexes work by holding baskets of underlying assets, crypto ETFs track the performance of digital assets in several ways.

• Spot ETFs directly hold cryptocurrency, building a portfolio replicating the crypto asset contained in it. 
• Other crypto ETFs invest in futures contracts to buy and sell crypto assets on the current day and at the current price. 

Crypto ETFs share prices that mimic changes in the cost of derivatives rather than the crypto assets themselves. Notably, the price of shares in a crypto ETF changes according to the cost of crypto futures contracts. There is also an additional risk associated with crypto ETFs caused by the lack of oversight and valuation concerns in the crypto exchanges from where the funds will be pulled. 

The approval of crypto ETFs lasted for several years. The SEC turned away 20 proposals in spot ETFs readily available for investors in Europe and Canada before finally approving crypto futures ETFs for the US market in January 2024. 

How to Invest in Crypto ETFs?

Investing in crypto ETFs is similar to investing in stocks. You need to have a brokerage account and add funds to that account. Once the account is funded, you can start investing in crypto ETFs. 

There are two main types of crypto ETF investment options: 

• There are two main types of crypto ETFs. One type gives you indirect ownership of actual cryptocurrency tokens. When you invest in this type of ETF, the fund's investment firm buys the crypto, so you indirectly own a share of it. 
• The second type doesn't directly buy or hold any cryptocurrency. Instead, it tracks derivatives like futures contracts and other crypto exchange-traded products. This kind of ETF mimics the prices of real cryptos, going up and down along with them.

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Newest Crypto ETFs List

Now that we have figured out the meaning of ETF crypto and discussed the basics of "What are crypto ETFs?" Let's proceed with a list of new crypto ETFs worth considering as investment options for 2024. 

Bitcoin ETF Token 

Bitcoin ETF is a great example of an investment opportunity for 2024. BTCETF is an ERC-20 token built on the Ethereum blockchain. Bitcoin Exchange-Traded Fund (ETF) is designed to simplify investments in Bitcoin by allowing stock market traders to purchase the assets' shares through traditional brokerage accounts, eliminating the technical complexities associated with buying and storing Bitcoin directly. 

Although BTCETF is not technically an ETF, its success is closely tied to SEC's Bitcoin approval, which results in benefits that are not directly available with direct investment. 

Bitcoin ETF benefits include: 

• High Annual Percentage Yield (APY) of 11,500%.
• Structure price appreciation (the $BTCETF price in one of the pre-sale stages is $0.005; in stage 10, the price will grow to $0.0068).
• Token burning due to a 5% burning tax (out of the 2.1 billion tokens available, 525 million will burn). 

Fidelity Advantage Bitcoin ETF

The Fidelity crypto ETF appeals to those investors who want to gain exposure to Bitcoin without the hassle of creating a digital wallet or an exchange account. Instead, one can buy, sell, and trade Fidelity Advantage Bitcoin ETF via a brokerage account. In return, you get your funds safely stored in cold wallets. Fidelity Advantage Bitcoin ETF is one of the best cryptocurrency ETFs offering direct exposure to Bitcoin. However, investors may find it discouraging since there is no room for diversification. 

Bitwise Crypto Industry Innovators ETF

Bitwise Crypto Industry Innovators ETF comes next on our list of new crypto ETFs to invest in 2024. This is a passively managed fund comprising 30 companies involved in managing digital assets, including MicroStrategy, Coinbase Global, Silvergate Capital, Marathon Digital, etc. This newest crypto ETF has diversified into multiple sectors, including mining, digital payments, and financial services. Unlike other best cryptocurrency ETFs on our list, Bitwise Crypto Industry Innovators ETF has a low expense ratio of 0.50% only. 

Ark Fintech Innovation ETF

The Ark crypto ETF comes next on the list of crypto ETFs to invest in 2024. This is an actively managed fund that tracks businesses seeking long-term growth in the financial technology sector. The major holdings of Ark Fintech Innovation ETF include companies providing transaction innovations and relying on blockchain technology. The expense ratio is 0.75%. 

Global X Blockchain ETF

Global X Blockchain ETF invests in 25 companies related to the blockchain sector. Some of the most notable holdings are Riot Blockchain and Coinbase Global. This crypto ETF comes with an expense ratio of 0.5% and has a 0.9 correlation with Bitcoin's price, meaning BTC's performance has a direct impact on the Global X Blockchain ETF's value. 

The introduction of new crypto ETFs has provided investors with a new opportunity to diversify their portfolios and find new opportunities to capitalise on the growth in the digital currency industry. Adding funds to the list of crypto ETFs listed above offers an extra opportunity to invest in crypto without the hassle of setting up crypto wallets or creating accounts on crypto exchanges yet benefit from diversification and risk management. 

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