What are stablecoin ETFs?

Stablecoin ETFs offer investors exposure to the stablecoin market, providing potential yield generation and diversification within the cryptocurrency sector.

Jan 09, 2025 at 03:33 pm

Key Points:

• Stablecoin ETFs are investment vehicles that track the value of baskets of stablecoins.
• Stablecoins are cryptocurrencies designed to maintain a stable value relative to a fiat currency.
• Stablecoin ETFs provide investors with opportunities to gain exposure to the stablecoin market.
• This article reviews the top 5 stablecoin ETFs and analyzes their performance, holdings, and fees.

1. Syntetix Staking (SSX)

• Launched by Synthetix in January 2023
• Tracks an index of three stablecoins: sUSD, sEUR, and sBTC

• Portfolio composition:

  • sUSD: 80%
  • sEUR: 15%
  • sBTC: 5%
• Opportunity for yield generation through staking rewards

2. Valkyrie Stablecoin Fund (VSCM)

• Launched by Valkyrie Investments in December 2021
• Invests in a diversified portfolio of stablecoins

• Portfolio composition (as of Jan. 2023):

  • BUSD: 61%
  • USDC: 27%
  • GUSD: 10%
  • USDT: 2%
• Low expense ratio (0.20%)

3. Amplify Transformational Data Sharing ETF (BLOK)

• Launched by Amplify ETFs in October 2021
• Invests in companies involved in blockchain and Web3 technologies

• Stablecoin representation within BLOK:

  • Coinbase Global (COIN): Primary custodian for Circle (issuer of USDC)
  • Signature Bank (SBNY): Banking partner for Paxos (issuer of USDP)
  • Silvergate Capital (SI): Banking partner for Diem (issuer of $FB)
• Provides indirect exposure to stablecoins through equity investments

4. VanEck Vector Digital Assets Infrastructure ETF (DAPP)

• Launched by VanEck in March 2023
• Invests in companies providing infrastructure to the digital asset industry

• Stablecoin representation within DAPP:

  • Coinbase (COIN): Cryptocurrency exchange and custodian
  • Bakkt Holdings (BKKT): Cryptocurrency exchange and wallet provider
  • Gemini Trust (GTM): Cryptocurrency exchange and custodian
• Provides access to the underlying infrastructure supporting stablecoin operations

5. Global X Blockchain & Bitcoin Strategy ETF (BKCH)

• Launched by Global X in March 2021
• Invests in companies with exposure to bitcoin and blockchain technologies

• Stablecoin representation within BKCH:

  • Coinbase (COIN): Cryptocurrency exchange and custodian
  • MicroStrategy (MSTR): Corporate investor in bitcoin
  • Block (SQ): Payment processing company developing a hardware wallet
• Offers diversified exposure to stablecoins through indirect investments

FAQs:

1. What are the benefits of investing in stablecoin ETFs?

• Provide exposure to the stablecoin market
• Potential for yield generation (staking rewards)
• Diversification within the cryptocurrency sector

2. What are the risks of investing in stablecoin ETFs?

• Risk associated with the underlying stablecoins (e.g., loss of peg)
• Fluctuations in the value of crypto assets
• Potential lack of liquidity