FA Alpha Daily

This ETF gives exposure to the entire Bitcoin universe

In today’s evolving investment landscape, investors are constantly seeking avenues to engage in cryptocurrencies while minimizing inherent risks. As interest in cryptocurrencies grows, so does the demand for investment vehicles offering an indirect approach. In today’s FA Alpha Daily, we explore the Bitwise Crypto Industry Innovators ETF and how viable it is for investors seeking to capitalize on both cryptocurrency growth and its broader ecosystem.

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Investors are continuously searching for ways to gain exposure to cryptocurrencies without taking the huge risks that come with it…

While direct investment in cryptocurrencies like Bitcoin and Ethereum remains popular, there’s an increasing interest in financial products that offer a more indirect approach to crypto investment.

Exchange-traded funds (ETFs) have emerged as a compelling option.

BlackRock’s recent announcements regarding a spot Bitcoin ETF and a spot Ethereum ETF have captured the investors’ attention, highlighting the growing acceptance and institutional interest in digital currencies.

However, we should not look over another player in the ETF space that has been quietly creating gains since its inception in April 2021, BITQ.

The Bitwise Crypto Industry Innovators ETF offers exposure not directly to cryptocurrencies but to companies with significant involvement in the crypto space. This includes companies engaged in mining, hardware, software, and services essential to the cryptocurrency ecosystem.

By investing in BITQ, investors can participate in the growth of cryptocurrencies without the direct risk associated with owning them.

BITQ’s top holdings include a mix of names with substantial exposure to the cryptocurrencies like Marathon Digital Holdings (MARA), MicroStrategy (MSTR), Coinbase Global (COIN), Bitfarms (BITF), and Northern Data AG (NB2.MU), among others.

These holdings collectively account for a significant percentage of the ETF’s total assets, reflecting the fund’s focus on companies driving innovation and growth in crypto.

The ETF’s performance has been huge as the crypto fallout has calmed down, with a gain of approximately 250% since early 2023.

The investment strategy behind this incredible return lies in the belief in the long-term growth of the crypto industry.

By focusing on companies that are poised to benefit from the expansion of digital currencies and blockchain technology, BITQ offers a way for investors to leverage the potential of crypto.

This approach not only capitalizes on the direct growth of cryptocurrencies but also on the broader ecosystem that supports and enhances their value.

The increasing adoption of cryptocurrencies and the ongoing development of blockchain technology can benefit the companies in the ETF’s portfolio.

Additionally, macro factors such as regulatory developments, institutional interest, and blockchain integration in various industries could further bolster the long-term prospects of BITQ and its underlying holdings.

Best regards,

Joel Litman & Rob Spivey

Chief Investment Strategist &
Director of Research
at Valens Research

This portfolio analysis highlights the same insights we share with our FA Alpha Members. To find out more, visit our website.

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