Crypto ETFs Are the Top Fund Performers as New Year Rally Strengthens
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, the 14 top-performing ETFs are all tied to digital assets, excluding leveraged products, out of about 2,000 funds tracked by Bloomberg, the media reported Friday, noting that crypto funds are dominating the $6.8 trillion ETF market.
The topside push by crypto funds comes as digital assets are off to a shining start this year. Bitcoin, the world's largest cryptocurrency, has passed the $21,000 price mark over the past day after months of inactivity. Ethereum has also reached around $1,600. Both coins have gained around 10% over the past day.
Crypto ETFs have come to the spotlight this year after a lackluster performance last year. In 2022, cryptocurrency-linked funds were among the worst performers as the industry lost around $2 trillion worth of value amid the collapse of a number of high-level projects.
More specifically, the Valkyrie Bitcoin Miners ETF (WGMI), a major Bitcoin mining fund with investment in 20 firms, including Argo Blockchain, Bitfarm and Intel, among other notable names, has gained around 70% year to date.
The WGMI ETF was listed on the Nasdaq in February 2022 but didn’t invest directly in BTC. 80% of its net assets offer exposure through the securities of companies that derive at least 50% of their revenue or profits from BTC mining. Valkyrie invests the rest of the 20% in companies holding “a significant portion of their net assets” in Bitcoin.
Furthermore, the VanEck Digital Assets Mining ETF (DAM) has surged roughly 56%, data compiled by Bloomberg show. The fund largely consisted of Bitcoin mining companies Riot, HIVE Blockchain Technologies, and Marathon Digital
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