Surrounding Crypto ETFs: Metaverse, Web3, and More

Last week, I discussed some of the different types of crypto and bitcoin ETFs. The distinction between futures-based ETFs and crypto equity ETFs is clear when you look closely at the two. But even when examining them closely, it may be difficult to distinguish between the different types of blockchain/crypto equity ETFs because of similarities with fintech, metaverse, and Web3 concepts. This note serves as a continuation of last week’s note and looks more closely at the differences between blockchain ETFs, metaverse ETFs, Web3 ETFs, and more.

Blockchain: The Future of Tech and Finance

If you’re already a crypto fan — you should be familiar with the term blockchain. Blockchain is a type of technology where transaction data is stored on a distributed (peer-to-peer) shared ledger. The Bitcoin blockchain is the most well-known blockchain; however, use cases extend beyond digital assets into supply chains and other financial transactions.

Blockchain ETFs are a type of industry ETF or thematic ETF — these typically have a high correlation with Bitcoin prices but also play on themes of the crypto economy, digital transformation, or the future of finance.

Generally, these ETFs hold the typical crypto-related equities including Coinbase (COIN), Microstrategy (MSTR), and the crypto miners. Some of these are more specific — for example, the Valkyrie Bitcoin Miners ETF (WGMI) is the only remaining crypto mining ETF after the closures of RIGZ and DAM earlier in 2023. These ETFs may also focus more specifically on the digital economy and fintech like the Grayscale Future of Finance ETF (GFOF) which contains holdings like Robinhood Markets (HOOD) and PayPal Holdings (PYPL). See last week’s note for more details.