Cryptocurrency and blockchain sector-related exchange traded funds have been rallying as retail traders fuel the wild rebound in a battered market segment.
Among the best performing non-leveraged ETFs over the past week, the First Trust SkyBridge Crypto Industry and Digital Economy ETF (NYSE Arca: CRPT) jumped 35.6%, the VanEck Vectors Digital Transformation ETF (DAPP) advanced 34.7%, the Bitwise Crypto Industry Innovators ETF (BITQ) rose 33.2%, the Global X Blockchain ETF (BKCH) increased 32.0%, and the iShares Blockchain and Tech ETF (IBLC) was 31.6% higher.
According to VandaTrack data, investors have acquired $1 billion worth of shares of crypto-related stocks over the past 10 days, Bloomberg reports.
“Retail traders are definitely surfacing here,” Ed Moya, senior market analyst at Oanda Corp, told Bloomberg. “Everyone expected one last major plunge for Bitcoin and now prices are recovering and risk appetite on Wall Street is somewhat improving.”
These crypto and blockchain sector-related companies are rallying as bitcoin prices rebounded to above $23,000 from $18,800 at the end of June. Nevertheless, bitcoin remains close to 50% lower so far this year after plunging from the record highs of almost $69,000 in November.
Stock trades on Fidelity’s brokerage platform have revealed that digital currency-related companies like Marathon Digital Holdings Inc., Coinbase Global Inc. and Riot Blockchain Inc. were among the most popular trades, attracting the most assets in response to the recovery.
Meanwhile, half of the 20 best-performing U.S.-listed ETFs since the end of June cover the crypto or blockchain industry.
“Whenever any stock or group breaks out of a multi-month range to the upside, the rally usually lasts several weeks,” Matt Maley, chief market strategist at Miller Tabak + Co., told Bloomberg. “It won’t happen in a straight line, so they could take a breather at any time, but the line of least resistance is now up.”
Nevertheless, even after July’s bounce, crypto stocks are still among the worst performers this year after investors ditched risk assets in face of an increasingly hawkish Federal Reserve and fears of an impending economic recession. Additionally, the spectacular failure of the TerraUSD stablecoin did not do the crypto market any favors.
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