Top 3 Crypto ETFs to Buy and Hold Forever (FBTC, FETH, BITW)

If you believe that cryptos will continue doing well, it won’t hurt to bump up your exposure and perhaps add altcoins to your portfolio. Exchange-traded funds are a great way to do that. BTC has been soaring due to these ETFs triggering inflows. A recent Trump order lets investors buy crypto ETFs directly into their 401(k)s. Spot ETFs have already been approved for Bitcoin and Ethereum, meaning BTC and ETH are directly procured by firms behind these ETFs.

This is great news for those who wish to buy and hold crypto for the long run. 401(k) plans come with tax advantages, so seeking exposure through an ETF is better tax-wise, even after the management fees.

Here are three crypto ETFs to look into:

Fidelity Wise Origin Bitcoin Fund (FBTC)

Fidelity Wise Origin Bitcoin Fund (BATS:FBTC) is a spot Bitcoin ETF, meaning you are essentially getting 1:1 BTC exposure in exchange for a small fee. Given that many spot Bitcoin ETFs do the same thing, the fee is what matters here. In this case, FBTC is quite average. It comes with a 0.25% fee, or $25 per $10,000 invested.

Some ETFs have their fees waived until next year, and you can get fees at just 0.15%. However, I would still prefer FBTC if you were the average investor. The fee difference is quite minimal, but you should pay attention to where the Bitcoin is held. Many other spot Bitcoin ETFs are responsible for holding and managing their BTC to Coinbase (NASDAQ:COIN). This is not unsafe, but it’s another moving part that can go wrong.

But FBTC retains responsibility within Fidelity. Fidelity has a self-custody model, so it holds the keys to its BTC. Fidelity is big enough to deal with any hacks or setbacks. It has $5.8 trillion in discretionary assets under management.

I would pay the extra $10 per $10k for the added peace of mind.

Fidelity Ethereum Fund (FETH)

I like Fidelity Ethereum Fund for the same reasons. The fees here are 0.25%, and Fidelity retains its own keys. Ethereum is the best altcoin you can hold for the long run, as the chain is the only one with proven staying power. Many other “Ethereum-killer” altcoins came and went, but few managed to perform through multiple cycles.

When you buy FETH, you get exposure to the most cutting-edge Web3 ecosystem. The Ethereum chain hosts not just the native token, but thousands of other smart contracts. This includes stablecoins, other tokens, and non-fungible tokens (NFTs). Solana is the closest competitor to Ethereum, but it is a fifth of the size and is still in “mainnet beta”. The chain had a major outage as recently as February 2024. In comparison, Ethereum has never gone offline.

Bitwise 10 Crypto Index Fund (BITW)

Bitwise 10 Crypto Index Fund is an ETF that gives you exposure to the top 10 biggest crypto projects. Here’s the composition.

The ETF tracks the Bitwise 10 Large Cap Crypto Index, which rebalances monthly based on market capitalization, liquidity, security risks, regulatory status, and other factors. If a crypto falls below the threshold during the rebalance, it is replaced by a higher-ranked one. It also excludes stablecoins.

In July, the Securities and Exchange Commission approved a request for BITW to switch to a spot ETF. This decision was immediately paused. BITW still gives you exposure as Bitwise holds altcoins in secure custody and rebalances each month.

Altcoin exposure is a good idea in this environment, as an altseason may be on the horizon. Bitcoin has been dominating, but historically, this dominance has been followed by exceptional performance by altcoins as capital trickles down. ETH has almost doubled in the past six months, which is a good sign.

The biggest caveat is that BITW has an expense ratio of 2.5%.

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