Blockchain ETFs vs Bitcoin ETFs: What’s the Difference?

Debuting more than a decade ago, cryptocurrency has both bewildered and fascinated investors. As is the case with most investment opportunities, cryptocurrency is not without risks, but when done right, it can become a valuable component of any investor’s portfolio. For many, crypto ETFs have become the preferred way to invest.

Despite the growth of cryptocurrency in recent years, many investors are still confused about the difference between blockchain and bitcoin. In fact, many, even in the media, will often use these terms interchangeably.

While this might not seem like a big deal, it can be when it comes to investing in crypto ETFs. It’s crucial for investors to understand the difference between blockchain ETFs and bitcoin ETFs before making any investment decisions.

Blockchain ETFs are the most established of the two. These ETFs are not tied to a specific company but rather it monitors the stock market prices of organizations that invest in some type of blockchain technology. This allows investors to invest in a wide range of industries. In fact, some major brands have partnered with companies outside of their specific industry to invest in blockchain technology. For example, IBM has partnered with Maersk to implement blockchain in the transportation industry.

Bitcoin ETFs, on the other hand, use the ownership of futures contracts traded on an exchange, such as the Chicago Board Options Exchange, to track bitcoin prices. Since these ETFs are not as established, they can be riskier. While bitcoin ETFs have been under regulatory scrutiny for years, the SEC’s (Securities and Exchange Commission) recent decision to allow the trading of bitcoin ETFs have alleviated some investors’ hesitation to buy. Shortly after this decision, ProShare Bitcoin Strategy ETF became the first bitcoin ETF.

This recent SEC decision has many investors thinking that now is the perfect time to invest in bitcoin ETFs. Other investors are still hesitant to invest in US bitcoin ETF and are therefore turning to Canadian ETFs, such as Purpose Bitcoin ETF, Blockchain Technologies ETF, Evolve Cryptocurrencies ETF, Bitwise Crypto Industry Innovators, and CI Galaxy Bitcoin ETF.

Investors looking to expand their investment portfolio and willing to take a risk on the continuous popularity of cryptocurrency should take steps now to purchase crypto ETFs, including bitcoin ETFs, blockchain ETFs, or both.