The U.S. Securities and Exchange Commission’s (SEC) approval of the first U.S. bitcoin-linked ETF, The ProShares Bitcoin Strategy ETF (BITO), on October 19 is a milestone for cryptocurrencies. The step could significantly boost investment flows into digital currencies. BITO had almost $1 billion in turnover on its first trading day.
Furthermore, bitcoin hit an all-time high yesterday, crossing$66,000 following BITCO’s approval. And cryptocurrencies could keep soaring as several countries legalize bitcoin, and investors’ interest in the high-flying digital currencies continues to grow.
While it’s challenging to select the best cryptocurrency, we think investors looking to capitalize on the industry tailwinds in a less risky way could bet on quality cryptocurrency ETFs Amplify Transformational Data Sharing ETF (BLOK) and First Trust Indxx Innovative Transaction & Process ETF (LEGR) to cash in on the favorable crypto trends.
Amplify Transformational Data Sharing ETF (BLOK)
Launched and managed by Amplify Investments LLC and co-managed by Toroso Investments, LLC, BLOK invests in companies that operate across blockchain technology, including research, development, utilization, and funding of blockchain-based transformational data sharing technologies sectors. It seeks to benchmark the performance of its portfolio against the S&P 500 and the MSCI AC World Index Net.
With $1.36 billion in AUM, BLOK’s top holding is Hut 8 Mining Corp. (HUT), which has a 6.47% weighting in the fund, followed by MicroStrategy Incorporated Class A (MSTR) at 6.22% and Marathon Digital Holdings Inc (MARA) at 5.80%. It has a 0.71% expense ratio, versus the 0.53% category average of 0.53%.
BLOK pays a $0.66 annual dividend, which yields 1.24% on the prevailing price. The ETF’s average four-year dividend yield stands at 1.08%. BLOK has gained 106.6% over the past year and nearly 52.3% year-to-date.
BLOK’s POWR Ratings are consistent with its growth outlook. It has an overall B rating, which equates to a Buy in our proprietary rating system. In addition, it has an A grade for Trade.
First Trust Indxx Innovative Transaction & Process ETF (LEGR)
LEGR is an exchange-traded fund launched and managed by First Trust Advisors L.P. The fund invests in companies that operate across information technology and blockchain technology sectors. It seeks to track the performance of the Indxx Blockchain Index by using the full replication technique.
Public joint-stock company Gazprom’s sponsored ADR has a 1.41% weighting in the fund as its top holding, followed by Sberbank Russia PJSC’s sponsored ADR at 1.41% and Salesforce.com, Inc. (CRM) at 1.38%. LEGR has $138.40 million in AUM. Its 0.65% expense ratio compares to the 0.50% category average.
LEGR pays $0.56 annually in dividends to its investors, which yields 1.26%. Its average four-year dividend yield stands at 1.21%. Over the past year, the fund has gained 36.4%; It has gained 18.5% year-to-date.
It’s no surprise that LEGR has an overall A rating, which equates to a Strong Buy in our proprietary rating system. In addition, it has an A grade for Trade, Buy & Hold, and Peer.
Click here to access all LEGR’s grades. LEGR is ranked #40 in the same group.
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BLOK shares were trading at $52.25 per share on Thursday afternoon, down $1.02 (-1.91%). Year-to-date, BLOK has gained 49.37%, versus a 22.29% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles. More...
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