Top 5 Blockchain Investment Alternatives in 2024

Introduction

Traditional investors often turn to mutual funds for wealth generation, a practice expected to extend into the crypto market. However, the scarcity of crypto mutual funds in the U.S. prompts the exploration of alternatives. This report outlines the top five blockchain investment alternatives available in 2024.

Our Pick: Bitcoin Strategy ProFund (BTCFX)

While the Bitcoin Strategy ProFund (BTCFX) is the sole U.S. crypto mutual fund, it offers unique advantages. Not only does it pioneer bitcoin strategy mutual funds, but it also diversifies investments in bitcoin futures, Canadian ETFs, Money Market Instruments, and Reverse Repurchase Agreements. This provides a distinctive gateway to BTC and crypto within traditional financial markets.

Blockchain Mutual Funds vs. Blockchain ETFs

Blockchain mutual funds face constraints limiting their portfolio to specific assets, excluding high-risk investments common in startups and digital assets. Distinguishing between mutual funds and ETFs, the latter, exemplified by the Amplify Transformational Data Sharing ETF (BLOK) and Siren Nasdaq NexGen Economy ETF (BLCN), provides exposure to blockchain technology by investing in relevant companies.

Blok: Amplify Transformational Data Sharing ETF (BLOK)

With $441 million AUM, BLOK is the largest blockchain ETF, focusing on “transformational data sharing technologies.” It strategically invests in companies partnering with or investing in blockchain technologies, diversifying risk and providing an avenue for investors seeking exposure without direct cryptocurrency holdings.

BLCN: Siren Nasdaq NexGen Economy ETF (BLCN)

At $61 million AUM, BLCN distinguishes itself by investing in companies actively contributing resources to blockchain development. Unlike BTCFX, BLCN directs investments toward innovative firms such as Coinbase, Microsoft, and PayPal, delivering a nuanced approach to blockchain-related investments.

BITO and BKCH: ProShares Bitcoin Strategy ETF (BITO) and Global X Blockchain ETF (BKCH)

BITO, with $1.6 billion in AUM, offers direct exposure to Bitcoin’s price movements, catering to investors focused on cryptocurrency dynamics. Conversely, BKCH, with $61 million AUM, concentrates heavily on companies directly involved in blockchain, making it ideal for those seeking concentrated exposure to blockchain enterprises.

Exchange-Traded Blockchain Investment Products

Exchange-Traded Notes (ETNs) and tracker certificates emerge for alternative investment avenues. VanEck leads this space, offering fully collateralized ETNs covering major cryptocurrencies. Although limited ETFs trade in the U.S., European options are available. The “Leaders” ETN from VanEck, boasting over 110% returns in the past year, exemplifies the potential of this approach.

Tokenized Blockchain Funds

The emergence of tokenized investment funds introduces innovative options. SpiceVC’s SPICE token enables indirect investment in promising blockchain ventures. Wisdomtree Prime, a digital application, facilitates diversified investments in digital coins, gold, bonds, and equities through a decentralized and transparent ledger system.

Crypto Hedge Funds and Venture Capital Firms

Crypto hedge funds and venture capital firms offer managed investments but often require high minimum contributions. PolyChain Capital, with a $1,000,000 minimum investment, focuses on early-stage blockchain startups. Pantera Capital, with a $100,000 minimum, provides a more accessible option. Other notable players include Digital Currency Group, Blockchain Capital, and Andreessen Horowitz (a16z).

Digital Real Estate Investing

Tokenized real estate platforms like Lofty.ai and RealBlocks redefine real estate investment. These platforms allow fractional investments, enabling broader participation. Blockchain’s integration enhances transparency, expedites contracts, and reduces costs, making real estate investment more efficient.

Invest in Digital Assets Directly

Directly investing in digital tokens offers a hands-on approach. Researching and managing private keys are essential. Blue-chip cryptocurrencies like Bitcoin, Ether, Cardano, Binance Coin, Tether, and Uniswap provide established investment options. Exclusive crypto content, such as the Blockchain Believers Portfolio, aids decision-making in this dynamic sector.

Conclusion

Given the limited options for crypto mutual funds, exploring alternatives becomes imperative. Whether opting for ETFs, tokenized funds, hedge funds, or direct investments in digital assets, investors can find suitable avenues based on risk appetite, exposure preferences, and investment goals. The diverse landscape of blockchain investments offers flexibility to investors, irrespective of their investment capacity.

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