Want Crypto Exposure without the Currency? These ETFs Own Crypto Miners
While the SEC has yet to approve a Bitcoin ETF, many ETFs still offer exposure to crypto assets via the stocks of cryptocurrency miners.
Cryptocurrency mining is the process by which new crypto coins are added to circulation. For most coins, including Bitcoin, new coins are mined through the use of computers to solve computational puzzles.
Three of the more popular publicly traded crypto mining stocks include Riot Blockchain (RIOT), Bit Digital (BTBT), and Marathon Digital Holdings (MARA).
These three crypto-miner stocks appear in a variety of ETF portfolios, but only one ETF includes all three stocks in its top 15 largest holdings: the Bitwise Crypto Industry Innovators ETF (BITQ).
Source: ETFdb. Data as of June 15, 2021
However, both the VanEck Vectors Digital Transformation ETF (DAPP) and Invesco DWA SmallCap Momentum ETF (DWAS) hold both Riot Blockchain and Marathon Digital in their top 15.
BITQ holds holds 10.28% of its portfolio in Riot Blockchain, 5.22% of its assets in Marathon Digital, and 2.96% of its assets in Bit Digital.
Overall, BITQ has 31 holdings, with 85% of its index tracking pure-play crypto companies, including crypto mining stocks. Up to 15% of the fund’s index focuses on large cap firms that include at least one business significantly focused on the crypto economy.
BITQ has an expense ratio of 0.85%.
Meanwhile, DAPP holds 5.70% of its assets in Riot Blockchain and 5.38% in Marathon Digital:
The fund has 27 total holdings and tracks a market-cap-weighted index of global companies that receive 50% of their revenue from digital assets. DAPP has an expense ratio of 0.65%.
DWAS is not a digital assets ETF, specifically, but a small cap momentum fund that uses the proprietary Dorsey Wright methodology to select a portfolio of roughly 200 names. It has an expense ratio of 0.60%.
It has minimal allocation to both Marathon Digital and Riot Blockchain, at 1.15% and 0.92%, respectively.
Other ETFs with exposure to Riot Blockchain include the Invesco DWA Technology Momentum ETF (PTF), which has 3.19% of its portfolio allocated to the stock and the SPDR S&P Kensho New Economies Composite ETF (KOMP), which has 1.84% of its portfolio in Riot.
Marathon Digital’s stock also appears in the Amplify Transformational Data Sharing ETF (BLOK), with a weighting of 3.52%, and the Invesco DWA Industrials Momentum ETF (PRN), at 3.42%.
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