Crypto Winter Starting to Thaw? | ETF Trends

Last year’s crypto winter was a harsh one for the world of digital assets, with the FTX affair the cherry on top. Bitcoin almost reached $48,000 per coin at its highest point last spring before careening down to almost as low as $15,700 by late November. But bitcoin has since rebounded back over $20,000 and up 26% over the last month, helping crypto ETFs dominate this past week’s top-performing ETFs, with all 10 focused on crypto or the blockchain.

What’s behind the rebound in returns for crypto ETFs? Bitcoin is the main factor, as crypto traders appear to be optimistic that the worst of the bear market for crypto may be over. Part of that may be that digital assets and stocks remain correlated, with ongoing investor hopes that the Fed may be slowing down its rate hikes, buoying equities markets for the start of the new year.

Part of the ETFs’ rebound may also be a reversion to the mean, given how badly they performed last year, as well. While it remains to be seen where the rest of 2023 takes crypto ETFs — with an SEC decision on spot bitcoin strategies still out there in the wilderness — it may be worth watching this week’s top performers.

Leading the way among the performers is the Valkyrie Bitcoin Miners ETF (WGMI), which has also outperformed its ETF Database category average by a staggering 5,000 basis points over the last month. The strategy charges 75 basis points for its active management, with its largest weight towards Bitfarms Ltd. (BITF), a bitcoin mining operation.

Other standouts in the past week’s top-performing ETFs include the Invesco Alerian Galaxy Crypto Economy ETF (SATO), the VanEck Digital Assets Mining ETF (DAM), and the VanEck Digital Transformation ETF (DAPP). The latter duo returned 48.8% and 40.6% for the week, while the former SATO returned 34.5%.

These were last week’s top performing ETFs. We’ve excluded funds which use leverage or make inverse bets on their underlying assets.

Ticker Name 1 Week Return
(WGMI ) Valkyrie Bitcoin Miners ETF 49.52%
(DAM ) VanEck Digital Assets Mining ETF 48.77%
(DAPP C+) VanEck Digital Transformation ETF 40.59%
(BKCH C+) Global X Blockchain ETF 37.55%
(BITQ ) Bitwise Crypto Industry Innovators ETF 37.20%
(SATO ) Invesco Alerian Galaxy Crypto Economy ETF 34.54%
(IBLC ) iShares Blockchain and Tech ETF 34.05%
(GFOF ) Grayscale Future of Finance ETF 31.87%
(FDIG ) Fidelity Crypto Industry and Digital Payments ETF 25.80%
(BITS ) Global X Blockchain & Bitcoin Strategy ETF 25.17% is owned by VettaFi, which also owns the index provider for SATO. VettaFi is not the sponsor of SATO, but VettaFi’s affiliate receives an index licensing fee from the ETF sponsor.

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