Seven cryptocurrency funds worth considering offer ways to provide from digital currencies and the companies committed to their success.
The seven cryptocurrency funds worth considering are led by one that I recommended for the MoneyShow’s 2024 Top Pick report that currently is ranked second among those proposed by dozens of prognosticators. Stocks and funds that soar like that one often are left behind the following year but it still could have legs to keep going strong into 2025.
Since the report was released last Jan. 9, my recommendation, Grayscale Bitcoin Trust ETF (NYSEARCA: GBTC), is just short of reaching a 100% return. The fund is solely and passively invested in bitcoin and its investment objective is to reflect the value of cryptocurrency held by the Trust, after factoring out expenses and other liabilities.
Bitcoin is gaining popularity among investors as a digital asset that is created and transmitted through the operations of a peer-to-peer Bitcoin network. The decentralized network of computers operates on cryptographic protocols. The Bitcoin network allows people to exchange tokens of value, in this case Bitcoins, that are recorded on a public transaction ledger known as a blockchain.
Seven Cryptocurrency Funds Worth Considering: Grayscale Bitcoin Trust ETF
Bitcoin is gaining value partly because it is supposed to have a finite number available for purchase. The cryptocurrency also has been helped by President-elects support for Bitcoin.
Technology company entrepreneur David Sacks has been announced as the president-elect’s choice to become the White House AI and crypto chief. The influential Sacks, who has 1 million-plus followers on X, will have a chance to develop and try to implement policies for cryptocurrencies
Chart courtesy of www.stockcharts.com
Seven Cryptocurrency Funds Worth Considering: BLOK
Mark Skousen, head of TNT Trader and scion of Ben Franklin, talks to Paul Dykewicz.
The Forecasts & Strategies investment newsletter and the TNT Trader advisory service both own cryptocurrency stocks through Amplify Transformational Data Sharing ETF (NYSE: BLOK), an exchange-traded fund (ETF) that invests in companies involved in the development and use of blockchain technology. The ETF also is comprised of companies that partner with and/or directly invest in blockchain technology.
BLOK further invests in companies that act as members of multiple consortiums dedicated to the particular technology. The ETF has soared more than 30% since the TNT Trader advisory service bean to recommend BLOK just a few months ago.
Subscribers to the TNT Trader advisory service were advised to buy call options recommended by Skousen that produced average returns of more than 120% in the same period. Skousen still has his subscribers holding the last quarter of those BLOK call options in an attempt to notch even higher profits.
BLOK’s top 10 holdings and their weightings, as of the close on Dec. 6, are Galaxy Digital Holdings (XTSE: GLXY), 4.96%; Core Scientific (NASDAQ: CORZ), 4.88%; Coinbase Global Inc. (NASDAQ: COIN), 4.82%; HUT 8 Corp. (NASDAQ: HUT), 4.71%; Robinhood Markets Inc. (NASDAQ: HOOD), 4.23%; MicroStrategy Inc. (NASDAQ: MSTR), 3.98%; Cleanspark Inc. (NASDAQ: CLSK), 3.52%; Block Inc. (NYSE: SQ), 3.40%; PayPal Holdings Inc. (NASDAQ: PYPL), 3.07%; MARA Holdings Inc. (NASDAQ: MARA), 3.00%.
BLOK has climbed 103.06% in the last year, 77.82% for the year to date, 64.08% over three months and 20.50% in the last month. The ETF has a modest current dividend yield of 0.68%.
Chart courtesy of www.stockcharts.com
Seven Cryptocurrency Funds Worth Considering: BITO
A third investment that has been doing well among dividend-paying cryptocurrency funds is ProShares Bitcoin Strategy ETF (ARCX: BITO). In fact, the Crypto & Commodities Trader is a new advisory service headed by Jim Woods, who recommends both stocks and options.
Woods, who also leads the Successful Investing advisory service, currently recommends ProShares Bitcoin Strategy ETF in that publication. BITO rocketed 137.33% in 2023, after dropping 63.91% in 2022, according to Morningstar. The fund also has jumped 113.18% in the last 12 months, 124.53% for the year to date, 87.74% over three months and 32.30% during the last month.
Paul Dykewicz meets with Jim Woods, head of Successful Investing.
BITO could appeal to income investors due to its hefty dividend yield that currently touches 46.66%. Investors who worry about potential losses and volatility from cryptocurrency investing may prefer BITO due to its dividend payouts, as well as its potential capital appreciation gains.
Chart courtesy of www.stockcharts.com
Seven Cryptocurrency Funds Worth Considering: Carlson’s Outlook
Bob Carlson, a retired pension fund chairman who heads the Retirement Watch investment newsletter, suggested four ETFs that have paid dividends and are invested in the digital and blockchain economy.
Bob Carlson, head of Retirement Watch, talks to Paul Dykewicz.
“They don’t invest in the digital currencies,” Carlson explained. “Instead, they invest in companies that use the blockchain technology that underlie the digital currencies or invest in other infrastructure that is used for blockchain technology. Some of the funds have positions in the bitcoin mining companies. Those companies should generate income from their regular bitcoin mining operations.”
In addition, most of the funds also have positions in Tysons Corner, Virginia-based MicroStrategy (NASDAQ: MSTR), which really is an indirect position in bitcoin, though it is highly overvalued at this point, Carlson continued.
Chart courtesy of www.stockcharts.com
“Readers should keep in mind that most of the shares have soared quite a bit in the last year and especially since Election Day,” Carlson said. “There’s a good chance of a correction that would allow a better entry level price.”
While the ETFs pay dividends, most of the dividends are modest, Carlson counseled.
“Also, the funds are relatively new, so we can’t make any long-term assessments about their ability to pay dividends and the level of any dividends,” Carlson cautioned.
Carlson identified four funds for potential investment.
Seven Cryptocurrency Funds Worth Considering: Schwab Crypto Thematic
Schwab Crypto Thematic (NYSEARCA: STCE) originated in mid-2022 and has paid dividends every six months since then. Its current dividend yield is 0.21%.
STCE has a diversified portfolio of about 40 securities of companies involved in various aspects of blockchain technology, digital assets and the digital currencies, Carlson said. About 62% of the fund is in the 10 largest positions.
The largest positions are MicroStrategy (NASDAQ: MSTR), Coinbase (NASDAQ: COIN), Hut 8 (NASDAQ: HUT), Cipher Mining (NASDAQ: CIFR) and Iris Energy (NASDAQ: IREN).
The fund is up 124.57% in the last 12 months, 68.51% for the year to date, 60.84% over three months and more than 35% in the last month.
Chart courtesy of www.stockcharts.com
Seven Cryptocurrency Funds Worth Considering: Grayscale Future of Finance
Another Carlson choice is Grayscale Future of Finance (NYSEARCA: GFOF). The fund launched in early 2022 and has paid dividends every six months with the exception of mid-2023.
Chart courtesy of www.stockcharts.com
The portfolio also is a fairly diversified collection of companies involved in various aspects of blockchain and digital asset activities. It owns 29 securities with 65% of the fund in the 10 largest positions.
Top holdings recently were Coinbase (NASDAQ: COIN), Robinhood Markets (NASDAQ: HOOD), MARA Holdings (NASDAQ: MARA), Block Inc. (NYSE: SQ), and PayPal Holdings (NASDAQ: PYPL).
GFOF is up 125.01% in the last 12 months, 60.75% for the year to date, 61.07% over three months and almost 40% in the last four weeks.
Seven Cryptocurrency Funds Worth Considering: iShares Blockchain and Tech
Another ETF Carlson suggested is iShares Blockchain and Tech (ARCX: IBLC), also founded in early 2022. IBLC has paid dividends every six months and recently featured a current dividend yield of 0.94%.
The fund recently held 47 securities with 73% of the fund in its 10 largest positions. The portfolio is a diversified group of stocks involved in various aspects of blockchain technology, bitcoin mining and digital assets or finance.
The largest positions recently were Coinbase (NASDAQ: COIN), MARA Holdings (NASDAQ: MARA), Core Scientific (NASDAQ: CORZ), Cleanspark (NASDAQ: CLSK), and Hut 8 (NASDAQ: HUT).
Its total return is 117.51% over the last 12 months, 49.00% for the year to date, 54.15% over three months and 37.57% in the last four weeks.
Chart courtesy of www.stockcharts.com
It owns about 70 securities with 34% of the fund in the 10 largest positions, Carlson counseled. Its holdings also are involved in various aspects of the digital economy and blockchain technology. The fund’s top 10 holdings on Dec. 6 were Bitdeer Technologies Group (NASDAQ: BTDR), 2.80%; Canaan Inc. ADR (NASDAQ: CAN), 2.51%; Hut 8 Corp. (NASDAQ: HUT); 1.89%; MicroStrategy Inc. (NASDAQ: MSTR), 1.74%; Northern Data AG (ETR: NB2), 1.69%; Iris Energy Ltd. (NASDAQ: IREN), 1.63%; Applied Digital Corp. (NASDAQ: APLD), 1.63%; MARA Holdings Inc. (NASDAQ: MARA), 1.63%, Bit Digital Inc. (NASDAQ: BTBT), 1.40%; and Salesforce Inc. (NYSE: CRM), 1.38%.
The fund rose 86.12% in the last 12 months, 64.35% for the year to date, 59.01% over three months and 20.38% during the last month.
Geopolitical Risk Rises
Investors also need to be mindful of geopolitical risk, especially when wars are raging in parts of the world. With Russia continuing its invasion in neighboring Ukraine, military action in the Middle East and other hot spots in the world, equities remain at risk.
Those who have been enticed to invest in cryptocurrencies, but are worried about the risk and volatility, may prefer to do so through ETFs that offer a bit of diversification.
Paul Dykewicz, www.pauldykewicz.com, is an award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Crain Communications, Seeking Alpha, Guru Focus and other publications and websites. Paul can be followed on Twitter @PaulDykewicz, and is the editor and a columnist at StockInvestor.com and DividendInvestor.com. He also serves as editorial director of Eagle Financial Publications in Washington, D.C. In that role, he edits monthly investment newsletters, time-sensitive trading alerts, free weekly e-letters and other reports. Previously, Paul served as business editor and a columnist at Baltimore’s Daily Record newspaper and as a reporter at the Baltimore Business Journal. Plus, Paul is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The uplifting book is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many other sports figures. To buy signed and specially dedicated copies, call 202-677-4457.
