The US presidential election is just around the corner, and the Fidelity Crypto Industry and Digital Payments ETF (FDIG) appears well-positioned to potentially benefit from the outcome.
I'm bullish on FDIG and its portfolio of crypto stocks, and could see a big tailwind if Trump wins. The fund isn't particularly diversified, but it does offer plenty of exposure to the digital asset space, which could grow under the Trump administration. FDIG also features a lower expense ratio than many of its peers. Additionally, sell-side analysts predict a potential upside of over 30% over the next 12 months, making FDIG an attractive investment opportunity.
Founded by Fidelity in 2022, FDIG is a relatively small ETF with $104.6 million in assets under management (AUM). According to fund sponsor Fidelity, FDIG's objective is to “provide an investment return that generally corresponds to the performance of the Fidelity Crypto Industry and Digital Payments Index, before fees and expenses.”
The Fund typically invests at least 80% of its assets in this index. The index consists of “companies engaged in activities related to cryptocurrencies, related blockchain technologies, and digital payment processing.”
Prediction market platform Polymarket It is currently estimated that former President Donald Trump has a 64% chance of winning the US presidential election in November. These high odds bode well for FDIG and its other crypto-related holdings, as President Trump has consistently been a vocal supporter of Bitcoin (BTC-USD), cryptocurrencies, and the crypto industry in the middle of a campaign. Trump spoke at major crypto industry events and met with industry leaders.
First and foremost, President Trump's inauguration is likely to be positive for Bitcoin. The former president spoke of establishing a “Strategic Bitcoin Reserve,” which would stockpile Bitcoin in a manner similar to the Strategic Petroleum Reserve, as a matter of national interest. President Trump's inauguration also bodes well for Bitcoin miners, as he has stated that he wants all remaining Bitcoin to be mined in the United States. The Biden administration's proposed 30% tax on Bitcoin miners will also not be considered.
Other players in the cryptocurrency industry are also likely to thrive with a friendlier and clearer regulatory framework under President Trump. President Trump has said he will explore a more collaborative approach with industry and create an advisory board of industry leaders. “The moment I take office, the persecution will stop and the weaponization of your industry will end,” Trump said. President Trump also said he wants to ensure the United States becomes the “crypto capital of the world.”
This more collaborative approach and clearer regulatory framework would be a good fit for crypto companies like Coinbase (COIN), which has been at loggerheads with regulators for the past four years.
If Trump loses, this trade will certainly lose momentum, but all hope is not lost.
Although the Biden administration has been fairly hostile to the crypto industry, Democratic candidate Kamala Harris may be steering the cryptocurrency industry toward greater acceptance given its popularity among young voters. In what is expected to be a very close election, with both candidates needing every vote they can get, Harris will likely attract voters based on her party's perceived stance on cryptocurrencies, even with a small number of voters. You probably don't want to alienate yourself. of voters.
While much of the crypto industry appears to be rallying behind Trump, mavericks like Ripple co-founder Chris Larsen are also backing Harris, with the billionaire adding 1,180 votes to Harris' camp. Donating $1,000. Uniswap CEO Hayden Adams and others are optimistic that Harris will be more open to crypto innovation than Biden, but her comments were met with skepticism from many others in the industry. It should be noted that he was seen with a lot of eyes.
Ultimately, a Trump victory in November would certainly create more momentum for the FDIG than a Harris victory, but a Harris victory would likely hold up the FDIG better than expected. There is a possibility.
FDIG owns 39 stocks, with the top 10 holdings accounting for 57.9% of the fund's assets. You can get an overview of FDIG's top 10 holdings below using TipRanks' Holdings tool.
As you can see, FDIG's largest holding is Coinbase, with a weight of 11.6%, and the remaining top holdings are Bitcoin miners like Marathon Digital (MARA) and Riot Platform (RIOT).
This might not result in a particularly diversified portfolio, but as discussed above, it would be one that should benefit in the coming years if Trump wins in November.
FDIG has an expense ratio of 0.39%. This means that an investor who allocates $10,000 to the fund will pay a $39 fee on an annual basis.
While this expense ratio may not be as low as broad market index funds, it's actually more affordable than many of FDIG's crypto-related ETF peers. For example, Van Eck Digital Transformation ETF (DAPP) and Global X Blockchain ETF (BKCH) have fees of 0.50% and 0.51%, respectively. On the other hand, iShares Blockchain and Tech ETF (IBLC) has an expense ratio of 0.47% and First Trust Indxx Innovative Transaction & Process ETF (LEGR) has a fee of 0.65%. Bitwise Crypto Industry Innovators ETF (BITQ) has an even higher fee of 0.85%.
You can get an overview of FDIG and its competitors below using TipRanks' ETF comparison tool. This tool allows investors to compare and contrast different ETFs based on a variety of customizable factors.
Turning to Wall Street, FDIG has a “Strong Buy” consensus rating, based on 33 Buy, 7 Hold, and 0 Sell ratings assigned over the past three months. FDIG's average price target of $41.87 implies a potential upside of 37.3% from current levels.
I'm bullish on FDIG and the crypto stocks it has in its portfolio heading into the election. prediction platform, PolymarketTrump seems increasingly confident that he will win the election, which should be a huge boost for FDIG and the crypto industry as a whole. Bitcoin is likely to be boosted by President Trump's plan to establish a strategic Bitcoin reserve, with miners likely to perform well based on the removal of potential punitive tax overhangs. , Coinbase and other industry players are likely to benefit from President Trump's more collaborative approach and laissez-faire. A fair attitude towards regulation.
Trump's defeat is certainly not ideal for the FDIG, but it may hold up better than most expected. The new Harris administration will likely need to be more accommodating toward the crypto industry than the Biden administration, as it will need to engage crypto voters in what is expected to be a close election.
