• Crypto ETFs are dominating the $6.8 trillion ETF market in 2023, as the digital assets market is off to a shining start.
• Among the top-performing ETFs are the Valkyrie Bitcoin Miners ETF (WGMI) and the VanEck Digital Assets Mining ETF (DAM), which have gained around 70% and 56% year to date, respectively.
• The WGMI ETF is listed on the Nasdaq and invests in 20 firms, including Argo Blockchain, Bitfarm and Intel, while DAM largely consists of investments in companies that mine cryptocurrencies.
Crypto markets have seen a surge in activity at the start of 2023, with Bitcoin and Ethereum both reaching new highs over the past day. This positive momentum has rippled out into the exchange-traded fund (ETF) market, with cryptocurrency-linked funds dominating the $6.8 trillion ETF industry.
Among the top-performing ETFs this year are the Valkyrie Bitcoin Miners ETF (WGMI) and the VanEck Digital Assets Mining ETF (DAM). WGMI has gained around 70% year to date, while DAM has seen a 56% surge in value. This is in stark contrast to 2022, when crypto-focused ETFs experienced a lackluster performance, with the industry losing around $2 trillion worth of value amid the collapse of a number of high-level projects.
The WGMI ETF was listed on the Nasdaq in February 2022 and offers exposure to Bitcoin mining through investments in 20 firms, including Argo Blockchain, Bitfarm and Intel. The fund invests 80% of its net assets in the securities of companies that derive at least half of their revenue or profits from mining the leading cryptocurrency, while the remaining 20% is invested in companies that hold a significant portion of their net assets in Bitcoin.
The VanEck Digital Assets Mining ETF (DAM), on the other hand, is largely composed of investments in companies that mine cryptocurrencies. This fund allows investors to gain exposure to the growth of the digital assets industry without the need to purchase or hold the underlying assets.
The success of these funds is a testament to the increasing popularity of digital assets as an asset class. As more investors look to gain exposure to the growth of the industry, ETFs provide a low-cost, accessible and secure way to do so. With the current rally showing no signs of slowing down, ETFs may continue to be the top performers in the coming months.