Crypto ETFs Are Most of the Year’s Best Performing Funds

Bitcoin prices are up and so are crypto and blockchain ETFs, which are now outperforming almost every other fund on public markets

article-image

AshDesign/Shutterstock, modified by Blockworks

share

Crypto, blockchain and bitcoin-related ETFs are off to a stellar start to the year.

Of the 20 best performing ETFs on the market year to date, 13 invest in the crypto sector, according to ETF Database.

Valkyrie’s Bitcoin Miners (WGMI) and GraniteShares’ 1.5x Long Coinbase Daily (CONL) lead the charge, sitting in third and fourth place with around 135% returns.

CONL provides leveraged exposure to the daily price fluctuations of Coinbase shares, after accounting for fees and expenses. Coinbase (COIN) is up more than 110% this year and has rebounded from Jan. 6’s all-time low of $31.55. 

VanEck’s Digital Assets Mining (DAM) and VanEck’s Digital Transformation (DAPP) follow in sixth and eighth place, respectively, having returned 120% and 100% so far this year.

ProShares’ UltraShort Bloomberg Natural Gas (KOLD) is number-one with 148% returns. The S&P 500 is up almost 7.5% across the same time period.

VanEck’s DAM follows MVIS’s Global Digital Assets Mining Index, which includes companies that generate at least 50% of their revenue from crypto mining or mining hardware manufacturing. Marathon, Riot and Hut 8 are its largest current holdings. DAPP’s portfolio is mostly bitcoin miners.

Investors allocate to ETFs instead of the underlying because they are widely available in traditional brokerage accounts, Sam Callahan, an analyst at bitcoin financial services firm Swan Bitcoin told Blockworks.

“It allows them to gain exposure in retirement accounts like IRAs and 401K’s given that ETFs are securities that fit into existing regulatory frameworks,” he said.

Still, ETFs come with additional costs and risks that don’t exist when investing in the underlying assets, according to Callahan.

Amplify’s Transformational Data Sharing ETF (BLOK), the industry’s largest blockchain fund with $437 million assets under management, ranks far below with 30% returns. 

The actively-managed fund holds Riot, MicroStrategy and Coinbase stock, among other obvious picks, but it also backs firms dabbling in blockchain more broadly, including GMO Internet Group, CME Group and Accenture.

Outperforming crypto-related ETFs are still tracking under the S&P 500 over the past year

Bitcoin helps crypto ETFs race to the top

Bitcoin (BTC) and ether (ETH) have outperformed other market sectors this year — a rising tide lifting these crypto ETFs.

Despite significant headwinds and uncertainty in the last 12 months, institutional investors have flagged intentions to allocate a portion of their portfolios to crypto funds. 

Earlier this month, Blockworks reported 48% of institutions still plan to buy up crypto ETFs — a drop of 6% from the year prior. The findings were based on responses gathered from 325 institutional investors, financial advisers and fund managers

“This kind of performance from crypto assets was unexpected going into 2023,” Miguel Morel, CEO at blockchain intelligence unit Arkham, told Blockworks. 

“Many investors were still sidelined and waiting for additional fallout from the previous year, but one unspoken rule of investing is that the market never waits for you to be ready.”


Get the day’s top crypto news and insights delivered to your email every evening. Subscribe to Blockworks’ free newsletter now.


Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from Blockworks Research’s Daily Debrief.


Can’t wait? Get our news the fastest way possible. Join us on Telegram and follow us on Google News.


Tags

upcoming event

MON - WED, MARCH 18 - 20, 2024

Digital Asset Summit (DAS) is returning March 2024. This year’s event will be held in our nation’s capital, where industry leaders, policymakers, and institutional experts will come together to discuss the latest developments and challenges in the ever-evolving world of cryptocurrency. […]

upcoming event

MON - WED, SEPT. 11 - 13, 2023

2022 was a meme.Skeptics danced, believers believed.Eventually, newcomers turned away, drained of liquidity and hope.Now, the tide is shifting and it’s time to rebuild. Permissionless II is the brainchild of Blockworks and Bankless. It’s not just a conference, but a call […]

recent research

The State of LSTFi

Research

There are five broad use cases for LSTs that are gaining traction alongside growth in demand: leverage farming, liquidity providing, LST baskets, stablecoin collateral, and interest rate derivatives.

/

article-image

Bring in the next million developers, and then we can start worrying about where to find the next billion users

article-image

Sponsored

Web3 real estate investing platform Parcl leverages blockchain to address the current bottlenecks facing property investing

article-image

Over 130 family office professionals surveyed noted a 90% client interest in crypto, a finding at odds with Goldman Sachs earlier this month

article-image

Newly announced Republican presidential hopeful Ron DeSantis claimed that the crypto industry would be doomed if President Biden is reelected

article-image

The 7-day average trading volumes for bitcoin have dropped to their lowest level in two and a half years alongside a muted derivatives market

article-image

Alexander Vinnik’s lawyers aim to swap his freedom for detained WSJ reporter Evan Gershkovich