The crypto-focused exchange-traded fund (ETF) market has seen a topside push in 2023 amid a surge in cryptocurrency prices.
So far this year, out of nearly 2,000 funds tracked by Bloomberg, the media, 14 top-performing ETFs are all tied to digital assets, excluding leveraged products. Reported Friday, noting that crypto funds are dominating the $6.8 trillion ETF market.
The topside push by crypto funds comes as the digital asset is off to a stellar start this year. The world’s largest cryptocurrency bitcoin has crossed the $21,000 price mark in the past after months of inactivity. Ethereum has also reached around $1,600. Both the coins have gained around 10% in the past days.
Crypto ETFs have come into the limelight this year after a poor performance last year. In 2022, cryptocurrency-linked funds were among the worst performers as the industry lost $2 trillion worth of value amid the collapse of several high-profile projects.
More specifically, the Valkyrie Bitcoin Miners ETF (WGMI), a leading bitcoin mining fund with investments in 20 firms, including Argo Blockchain, Bitfarm and Intel, among other notable names, has gained nearly 70% year to date.
The WGMI ETF was listed on the Nasdaq in February 2022, but does not invest directly in BTC. 80% of its net assets provide exposure through securities of companies that derive at least 50% of their revenue or profit from BTC mining. Valkyrie invests the remaining 20% in companies holding “a significant portion of its net assets” in bitcoin.
In addition, the VanEck Digital Assets Mining ETF (DAM) has gained about 56%, data compiled by Bloomberg shows. The fund largely includes bitcoin mining companies Riot, HIVE Blockchain Technologies and Marathon Digital Holdings.
Double-digit gains in VanEck Digital Transformation ETF (DAPP), Global X Blockchain ETF (BKCH) and Bitwise Crypto Industry Innovators ETF (BITQ) helped round out the five best-performing exchange-traded funds this year. Athanasios Sarofagis at Bloomberg Intelligence said:
“There is a slight reversal to the averages to start the year – the worst performing equity ETFs of 2022 are starting 2023 on the strongest foot, especially crypto-linked ETFs. Investors who deducted tax loss in 2022 are now looking to come back. ,
crypto etf Provide exposure to crypto without the additional cost of ownership. Therefore, these funds are considered to be the next big step for the crypto industry that could lead to mainstream adoption.
Launched in 2021, the ProShares Bitcoin Strategy ETF was the first bitcoin ETF to be approved in the United States. However, this fund tracks bitcoin prices through futures contracts traded on the CME Marketplace, unlike spot bitcoin ETFs.
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