Bitcoin has surged over 80% in the last year, hitting all-time highs above $120,000. A more favorable regulatory environment may have contributed to the gains, encouraging cautious investors to enter the crypto market. However, risks such as volatility, security concerns, and exchange risks still exist.
Investors interested in the recent crypto rally but wary of direct investments can consider risk-limiting crypto ETFs. These funds offer exposure to the crypto market indirectly through shares of diversified portfolios, combining crypto focus with stability from traditional investments. Many of these ETFs have outperformed the S&P 500 YTD.
The Fidelity Crypto Industry and Digital Payments ETF (FDIG) is a top-performing crypto-adjacent ETF that holds a basket of stocks related to cryptocurrency, digital payments, and blockchain. With around 52 holdings across small, mid, and large caps, FDIG offers exposure to various sectors. It has returned about 24% YTD, outperforming the S&P 500.
The Bitwise Ethereum Strategy ETF (AETH) focuses on Ethereum with a strategy that uses U.S. Treasuries during volatile periods to minimize risk. AETH has outperformed buy-and-hold crypto funds by rotating between Ether Futures and Treasuries, delivering a YTD return of 32.6%. Although fees are higher, the added security may be worth it.
The One+One Bitcoin and Ether ETF (OOQB) offers leveraged exposure to both Bitcoin and the Nasdaq-100 index via futures. This unique ETF balances the higher risk of Bitcoin futures with the stability of Nasdaq-100 stocks. With a return of over 50% in the last three months, OOQB provides short-term exposure to Bitcoin with some protection.
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Read more at Nasdaq: Crypto Skeptics Can Still Win Big With These Risk-Limiting ETFs