Bitcoin, the world’s largest cryptocurrency, made a significant recovery and surpassed the $30,000 mark for the first time in months, shrugging off economic uncertainty and recent regulatory crackdowns on some crypto exchanges. Bitcoin’s value rose as much as 9.8% on Jun 21, peaking at $30,749.45. This marked the first time since mid-April that Bitcoin had crossed the $30,000 threshold.
The combined effects of institutional interest, potential ETF approval and market sentiment contributed to Bitcoin’s recent rally. Investors looking to ride the boom could consider ETFs like Valkyrie Bitcoin Miners ETF WGMI, Invesco Alerian Galaxy Crypto Economy ETF SATO, Blockchain & Bitcoin Strategy ETF BITS, VanEck Bitcoin Strategy ETF XBTF, and ProShares Bitcoin Strategy ETF BITO. These funds have shown strong momentum over the past week, gaining nearly double digits.
Behind the Surge
A significant catalyst for the recent price increase was BlackRock’s request to register a spot-market Bitcoin ETF, which came six days before the price surge. BlackRock, the world’s largest money manager, lodged the request despite the U.S. Securities and Exchange Commission (SEC) not approving any applications for spot Bitcoin ETFs so far. The ETF, if approved, would own Bitcoins held in custody by Coinbase, the largest U.S.-based crypto exchange. This move followed closely on the heels of the launch of a new crypto exchange backed by Fidelity, Charles Schwab and Citadel Securities.
The bitcoin rally has sparked speculation that the SEC might finally be appeased. This speculation was further fueled by similar applications from other major players such as Invesco, WisdomTree and Bitwise. Further, the launch of a digital-asset exchange, EDX Markets, backed by firms including Citadel Securities, Fidelity Digital Assets, and Charles Schwab Corp, has also contributed to the boost in crypto sentiment. Other supportive factors for Bitcoin include expectations of more stimulus in China to boost its economy.
The latest increase extended a rally that saw Bitcoin’s prices shoot up almost 20% over the last week. It’s worth noting that just last week, Bitcoin’s price plunged below $25,000 for the first time since March due to lawsuits by regulators against crypto exchanges like Binance and Coinbase. The decline was also due to the Federal Reserve’s announcement that it would not hike interest rates this month but could return to aggressive increases later in the year (read: Best Investing Area of 2023 & Its Top ETFs).
The Bitcoin rally has outperformed a 13% jump in an index of the largest 100 virtual coins over the same period, and it has also diverged from the performance of stocks, marking a negative short-term correlation between Bitcoin and the Nasdaq 100 gauge of technology shares for the first time since 2021.
The recent developments have led to a surge in excitement and interest around cryptocurrencies, particularly from large financial institutions, marking a potential shift in Wall Street’s perception of the crypto sector.
ETFs in Focus
Valkyrie Bitcoin Miners ETF (WGMI)
Valkyrie Bitcoin Miners ETF is an actively managed ETF that will invest at least 80% of its net assets (plus borrowings for investment purposes) in securities of companies that derive at least 50% of their revenues or profits from bitcoin mining operations and from providing specialized chips, hardware and software or other services to companies engaged in bitcoin mining. Valkyrie Bitcoin Miners ETF holds 22 stocks in its basket with a double-digit concentration on the top two firms (read: 5 Best Performing ETFs of the New Bull Market).
Valkyrie Bitcoin Miners ETF has amassed $10.3 million in its asset base while trading in an average daily volume of 75,000 shares. It charges 75 bps in annual fees.
Invesco Alerian Galaxy Crypto Economy ETF (SATO)
Invesco Alerian Galaxy Crypto Economy ETF provides exposure to the companies that are materially engaged in cryptocurrency, cryptocurrency mining, cryptocurrency buying, or enabling technologies and exchange-traded products (“ETPs”) and private investment trusts traded over-the-counter that are linked to cryptocurrencies. It follows the Alerian Galaxy Global Cryptocurrency-Focused Blockchain Equity, Trusts and ETPs Index, holding 36 stocks in its basket with a higher concentration on the top firm.
Invesco Alerian Galaxy Crypto Economy ETF has accumulated $3.8 million shares and charges 61 bps in annual fees. It trades in a volume of 2,000 shares a day on average.
Blockchain & Bitcoin Strategy ETF (BITS)
Blockchain & Bitcoin Strategy ETF is an actively managed fund that seeks to capture the long-term growth potential of the blockchain and digital assets theme. It takes long positions in U.S. listed bitcoin futures contracts and invests, directly and indirectly, in companies positioned to benefit from the increased adoption of blockchain technology. Blockchain & Bitcoin Strategy ETF will not invest directly in bitcoin, and it currently delivers exposure to blockchain companies through other ETFs, including the affiliated Global X Blockchain ETF.
Blockchain & Bitcoin Strategy ETF has attracted $11.3 million in its asset base. It charges 65 bps in annual fees and trades in an average daily volume of 2,000 shares (read: Time for Growth ETF Investing?).
VanEck Bitcoin Strategy ETF (XBTF)
VanEck Bitcoin Strategy ETF seeks capital appreciation by investing in bitcoin futures contracts. It is actively managed and offers exposure to bitcoin-linked investments through an accessible exchange-traded vehicle. XBTF does not invest in bitcoin or other digital assets directly and charges 76 bps in annual fees.
VanEck Bitcoin Strategy ETF has amassed $39.2 million in its asset base and trades in a volume of 17,000 shares a day on average.
ProShares Bitcoin Strategy ETF (BITO)
ProShares Bitcoin Strategy ETF invests primarily in bitcoin futures contracts and does not invest directly in bitcoin. It is the world’s largest and most actively traded cryptocurrency ETF with AUM of $854.8 million and an average trading volume of 8 million shares. ProShares Bitcoin Strategy ETF charges 95 bps in annual fees.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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Invesco Alerian Galaxy Crypto Economy ETF (SATO): ETF Research Reports
ProShares Bitcoin Strategy ETF (BITO): ETF Research Reports
VanEck Bitcoin Strategy ETF (XBTF): ETF Research Reports
Global X Blockchain & Bitcoin Strategy ETF (BITS): ETF Research Reports
Valkyrie Bitcoin Miners ETF (WGMI): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
