The Betashares Crypto Innovators ETF (ASX: CRYP) is trading at $8.80 per unit, up 1.44% on Thursday.
The ASX ETF reached a new record high of $8.85 on Tuesday, along with scores of other ETFs like IOO, IVV, and VGS.
Aussies just love their exchange-traded funds (ETFs), with a record $5.28 billion invested in July alone.
And with cryptocurrencies remaining an alluring investment option for many people, it's not surprising to see a crypto ETF doing well.
Image source: Getty Images
What is CRYP ETF?
CRYP ETF offers ASX investors a way of investing in crypto without buying cryptocurrencies directly.
Instead, it invests in global pure-play crypto companies that generate significant revenue from crypto or hold substantial crypto assets.
These companies are from various industry segments.
For example, 62% of the CRYP ETF is invested in application software companies, 15% in financial exchanges and data, 9% in asset management and custody banks, 4% in transaction and payment processing firms, and 3.5% in hotels, resorts, and cruise lines.
Betashares describes CRYP's purpose:
The crypto economy has been growing strongly, aided by the performance of Bitcoin, Ethereum and other digital assets over the past ten years, with this growth anticipated to continue.
CRYP provides 'picks and shovels' exposure to the companies building crypto mining equipment, crypto trading venues, and other key services that allow the crypto economy to thrive.
Like most ETFs, CRYP seeks to mirror the performance of an index, before fees. The index is the Bitwise Crypto Innovators Index.
ASX CRYP currently holds 48 companies. Seven out of 10 are based in the United States.
The next largest geographic exposures are Australia (7.5%), Canada (6%), Japan (3.5%), China (3%), and Germany (2.5%).
ASX CRYP's top five holdings are the crypto exchange operator, Coinbase Global Inc (NASDAQ: COIN), the enterprise software company, MicroStrategy Inc (NASDAQ: MSTR), Bitcoin mining companies IREN Ltd (NASDAQ: IREN) and Marathon Digital Holdings Inc (NASDAQ: MARA), and cryptocurrency mining operator Riot Platforms Inc (NASDAQ: RIOT).
CRYP does not pay dividends (or 'distributions', as ETFs call them).
The management fee is 0.67% per annum.
Say you invested $10,000 in CRYP ETF 3 years ago…
CRYP ETF began trading on the ASX in November 2021.
Its three-year average total annual return currently sits at 35.7%.
Let's see how that translates for an initial $10,000 investment.
On 26 September 2022, CRYP ETF closed at $2.56 apiece.
If you had put $10,000 into CRYP then, it would have bought you 3,906 units (for $9,999.36).
There's been capital growth of $6.24 per unit since then. That translates to a near $25,000 uplift for you ($24,373.44 to be exact).
Thus, your ETF holding is now worth $34,372.80.
While this is an astounding rate of return, Betashares says CRYP ETF is only suitable for investors with a high risk tolerance.
The ETF provider says:
An investment in CRYP should be considered very high risk.
Crypto-assets are highly speculative in nature and companies with significant exposure to crypto-asset markets can be expected to have a very high level of return volatility.
