Why Invest in Cryptocurrency ETFs for Cybersecurity?
The rise of cybercrime and breaches means that companies that help protect against these crimes and assist in handling them are in greater demand than ever. The best way to benefit from this trend in cybercrime is through cryptocurrency ETFs for cybersecurity.
Challenges and Trends Driving Demand for Cybersecurity in the United States
High reliance on IT systems
Increased risks related to IT systems
The need to secure personal information
Best Cryptocurrency ETFs for Cybersecurity
There are a few cryptocurrency ETFs for cybersecurity currently available. We highlight two of them:
ETFMG Prime Cyber Security ETF (HACK)
HACK claims to be the first and largest cryptocurrency ETF for cybersecurity on the market. It contains about 60 stocks of companies that are directly or indirectly involved in the cybersecurity industry. Major holdings include companies like Cloudflare Inc, Cisco Systems Inc, Palo Alto Networks Inc, and Fortinet Inc. The expense ratio for HACK is 0.60%.
First Trust NASDAQ Cybersecurity ETF (CIBR)
This fund tracks the CTA Cybersecurity Index, which includes 36 stocks of companies engaged in building, implementing, and managing cybersecurity for private and public networks, computer systems, and mobile devices. Assets under management total $5.5 billion. Major holdings include companies such as Palo Alto Networks Inc, Accenture Plc, and Cisco. The expense ratio for CIBR is 0.60%.
Conclusion
Cryptocurrency ETFs for cybersecurity have long-term growth potential, but the short-term market risks of funds investing in only a narrow sector of the market should be noted. Specialized funds in a narrow industry should only represent a small portion of a diversified portfolio, such as 5% to 10%. You should first determine if they are appropriate for your risk tolerance. Evaluate your goals before investing in sector funds like these.
Frequently Asked Questions (FAQs)
What do cybersecurity companies do?
How many cybersecurity jobs are there?
Sources:
EFTMG. “HACK: ETFMG Prime Cyber Security ETF.”
First Trust. “First Trust Nasdaq Cybersecurity ETF (CIBR).”
Bureau of Labor Statistics. “Information Security Analysts.”
Source: https://www.thebalancemoney.com/best-cyber-security-etfs-4176623
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