The cryptocurrency investment landscape has evolved rapidly with the introduction of Exchange-Traded Funds (ETFs) focused on Bitcoin and Ethereum. These financial instruments offer investors exposure to digital assets without the complexities of direct ownership, such as wallet management or private key security. As of July 3, 2025, a wide range of Bitcoin and Ethereum ETFs are available across different markets and currencies—primarily in Hong Kong dollars, U.S. dollars, and Chinese yuan—providing diversified access points for global investors.
This article explores key performance metrics including annualized standard deviation, Sharpe ratio (1-year), and beta (1-year) for major cryptocurrency ETFs. We’ll analyze risk-return profiles, compare spot versus futures-based funds, and highlight strategic considerations for portfolio integration.
Understanding Key Performance Indicators
Before diving into specific ETFs, it's essential to understand the metrics used to evaluate their performance:
- Annualized Standard Deviation: Measures volatility. A higher value indicates greater price swings and higher risk.
- Sharpe Ratio (1-Year): Evaluates risk-adjusted returns. A ratio above 0.5 is generally favorable; negative values suggest poor returns relative to risk.
- Beta (1-Year): Reflects sensitivity to market movements. A beta close to 1 means the ETF moves similarly to the broader market; values above 1 indicate higher volatility.
These metrics help investors assess whether an ETF aligns with their risk tolerance and return expectations.
Spot vs. Futures-Based Bitcoin ETFs: Risk and Return Comparison
Bitcoin ETFs can be broadly categorized into two types: spot ETFs, which hold actual Bitcoin, and futures-based ETFs, which invest in Bitcoin futures contracts.
Spot Bitcoin ETFs
Major spot Bitcoin ETFs like IBIT (iShares Bitcoin Trust), FBTC (Fidelity Wise Origin Bitcoin ETF), and BTCO (Invesco Galaxy Bitcoin ETF) show consistent metrics:
- Annualized standard deviation: ~47%
- Sharpe ratio: ~0.40
- Beta: ~0.96
These funds track Bitcoin prices closely with moderate volatility and solid risk-adjusted returns, making them suitable for long-term investors seeking pure exposure.
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Futures-Based Bitcoin ETFs
Futures-based options such as BITO (ProShares Bitcoin Strategy ETF) and ARKA (ARK 21Shares Bitcoin Futures Strategy Active ETF) exhibit slightly higher volatility:
- Annualized standard deviation: ~47%
- Sharpe ratio: ~0.35–0.36
- Beta: ~0.95
While they offer similar exposure, futures roll costs may impact long-term performance, especially in contango markets.
Ethereum ETFs: Higher Volatility, Lower Risk-Adjusted Returns
Ethereum-focused ETFs display significantly higher volatility compared to their Bitcoin counterparts.
For example:
- 3009 (BoC HashKey Ether ETF): 79.44% standard deviation, Sharpe ratio of -0.02
- 3046 (CSOP Ether ETF): 79.62% standard deviation, Sharpe ratio of -0.02
- ETHU (2x Long Ethereum ETF): 161.62% standard deviation
High volatility reflects Ethereum’s more speculative nature and its sensitivity to regulatory developments and network upgrades (e.g., Ethereum 2.0). Most Ethereum ETFs have negative or near-zero Sharpe ratios, indicating that returns haven’t compensated for the elevated risk over the past year.
Leveraged products like ETHT (2x Long Ethereum ETF) amplify both gains and losses, making them suitable only for short-term traders with high risk tolerance.
Regional and Currency Variants
Several issuers offer the same underlying fund in multiple currencies:
| Fund | USD Version | HKD Version | CNY Version |
|---|---|---|---|
| CSOP Bitcoin ETF | 9042 | 3042 | 83042 |
| CSOP Ether ETF | 9046 | 3046 | 83046 |
Performance varies slightly due to currency conversion effects:
- The CNY-denominated 83042 CSOP Bitcoin ETF shows a higher standard deviation (47.21%) than its USD counterpart (44.04%), reflecting added currency risk.
- Similarly, the CNY Ether ETF (83046) has a standard deviation of 80.74%, compared to 78.38% for the USD version.
Investors should consider currency exposure when selecting between versions.
Leverage and Inverse ETFs: Tools for Tactical Trading
Leveraged and inverse ETFs are designed for short-term trading strategies rather than buy-and-hold investing.
Double-Long Bitcoin ETFs
- BITU (ProShares Ultra Bloomberg Bitcoin): 101.09% standard deviation, beta of 2.10
- BITX (2x Long Bitcoin Strategy ETF): 101.75% standard deviation
These funds aim to deliver twice the daily return of Bitcoin but suffer from compounding decay over time.
Inverse Bitcoin ETFs
- BITI (ProShares Short Bitcoin): -0.50 Sharpe ratio, beta of -0.75
- SBIT (ProShares UltraShort Bitcoin): -0.59 Sharpe ratio, beta of -1.29
These allow bearish bets but are risky over extended periods due to volatility drag.
👉 Explore how leveraged crypto ETFs can fit into tactical investment strategies.
Diversified and Thematic Crypto ETFs
Some funds go beyond single-asset exposure:
- BTF (CoinShares Valkyrie Bitcoin & Ether Strategy ETF): Combines both assets with a standard deviation of 58.75% and a low Sharpe ratio of 0.10.
- BEGS (Rareview Overlay Crypto & Precious Metals ETF): Integrates crypto with gold/silver; data not yet available.
- SPBC (Simplify U.S. Equity + Bitcoin Strategy ETF): Blends traditional equities with Bitcoin allocation—lower volatility at 18.28%, beta of just 0.31.
These hybrid models may appeal to investors seeking balanced exposure with reduced overall portfolio risk.
Frequently Asked Questions (FAQ)
What is the difference between spot and futures-based crypto ETFs?
Spot ETFs hold actual cryptocurrency, offering direct price exposure. Futures-based ETFs use derivatives contracts, which may introduce tracking error and roll yield impacts over time.
Which Bitcoin ETF has the best risk-adjusted return?
As of July 2025, multiple spot Bitcoin ETFs—including IBIT, FBTC, ARKB, and BTCO—share a Sharpe ratio of 0.40, indicating strong risk-adjusted performance relative to peers.
Are leveraged crypto ETFs suitable for long-term holding?
No. Due to daily rebalancing and compounding effects, leveraged ETFs like BITU or ETHT deviate significantly from long-term multiple returns and are best used for short-term trading.
Why do most Ethereum ETFs have negative Sharpe ratios?
Ethereum’s price experienced high volatility without corresponding positive returns over the past year, leading to negative or near-zero Sharpe ratios across most Ether-linked funds.
Can I invest in crypto ETFs using different currencies?
Yes. Major funds like CSOP and BoC HashKey offer versions in USD, HKD, and CNY, allowing investors to choose based on currency preference and hedging needs.
How does beta affect my investment decision?
A beta above 1 means the ETF is more volatile than the market; below 1 suggests lower sensitivity. For instance, leveraged ETFs have betas over 2, while diversified funds like SPBC have much lower betas.
Final Thoughts: Building a Strategic Crypto Allocation
Cryptocurrency ETFs provide accessible gateways into digital asset markets, but performance varies widely based on structure, leverage, and underlying exposure.
For conservative investors:
- Focus on spot Bitcoin ETFs with proven track records (e.g., IBIT, FBTC).
- Consider diversified hybrid funds like SPBC for lower volatility.
For aggressive traders:
- Use leveraged/inverse ETFs tactically.
- Monitor Ethereum-related funds during major network events.
Regardless of strategy, always align choices with your risk profile and investment horizon.
👉 Start exploring top-performing crypto ETFs with real-time data and insights today.