In the blockchain ecosystem, exchange-traded funds (ETFs) are growing in popularity. Even if Bitcoin ETFs have encountered many legal regulations, blockchain ETFs have been featured on major stock exchange platforms since January 2018.
Let’s have a detailed look at their similarities and differences.
Blockchain ETF
Making investments in stocks that use blockchain technology is the key objective of blockchain ETFs. While publicly traded companies might have their own cryptocurrency, blockchain ETFs are entirely concentrated on stock investments. Because of this reason, they are presently viewed as more regulatory-friendly.
Trading in Blockchain ETFs
Trading blockchain ETFs are identical to trading stocks. Famous blockchain ETFs are available to users on trading websites like Robinhood and E-Trade.
Some of the most popular blockchain ETFs are the New York Stock Exchange (NYSE) and the Nasdaq Stock Market (NASDAQ).
ETFs in general have lower costs than individual stock markets. Ever since fractional shares have become famous, investors can easily get both.
Bitcoin ETFs
Investing in Bitcoin ETFs does not allow purchasing or disposal of business stocks. However, they give an opportunity to the users to learn in detail about Bitcoin and other cryptocurrencies.
Each Bitcoin ETF mirrors the value of its assets holdings even if users don’t actually buy cryptocurrencies straight forward. Bitcoin ETFs do however have some noteworthy benefits.
For example, traditional users who like to avoid managing their own Bitcoin wallet address or private key could think of investing in Bitcoin ETFs.
However private trusts and Bitcoin ETFs are only available to authorized investors. For example, it takes a lot of work to become an authorized investor in the US.
To be eligible an individual’s net worth should be at least $200,000 per year for both of previous years and expect the same or more this year.
Some of The Key Differences
| Bitcoin ETFs | Blockchain ETFs |
| Directly held by Spot Bitcoin ETFs | Pay attention to businesses using Blockchain |
| To monitor Bitcoin prices, other Bitcoin ETFs make investments in cryptocurrency futures | Invest in shares of the company rather than Bitcoin |
| Usually more volatile | Usually more steady |
| A number of businesses are working on blockchain technology which is not entirely limited to any one industry or product. |
How to Invest in Blockchain ETFs
The majority of stocks including E*Trade, Fidelity, and Robinhood offer blockchain ETFs.
Using the ETF screener at your investment firm and searching for “blockchain” will help to receive the most results for these products. This will ultimately guide you to a list of funds that need further research to decide if they fit your investment requirements.
How to Invest in Bitcoin ETFs
The same operator you use for other ETF investments can also be used to invest in a Bitcoin ETF.
Search for funds related to cryptocurrencies by typing terms like “Bitcoin” or “crypto” into your operator’s ETF screener.
After finishing that process there’s scope to search even more by digging through the investment philosophies and management of each fund.
Responses to Ever-Evolving Landscape of Technology and Finance
Blockchain ETFs reflect Investments from a cross-section of blockchain technology companies in various sectors. They generally respond more according to the larger trends and sophistication in the technology and financial market.
On the other hand, Bitcoin ETFs react differently than the broader financial or technological markets when it comes to the events that impact the cryptocurrency market.
The price of Bitcoin can be impacted by regulatory news, adoption by major groups, economic circumstances, or issues in the cryptocurrency space that have the potential to change investors’ perception of digital currencies.
The Bottom Line
Blockchain ETFs provide a broader or diversified way to invest in Blockchain technology companies, ensuring stability and regulations.
On the contrary Bitcoin’s price fluctuations are ideal for those aiming to avoid direct management with cryptocurrency.
Both ETFs have different functionalities and are subject to various investor needs and risks involved in the developing scenario of digital marketing.
