Crypto-Linked ETFs Soar in 2023, Outperforming Expectations

Crypto-Linked ETFs Soar in 2023, Outperforming Expectations

VanEck’s Digital Transformation ETF (DAPP) leads the pack with a 207% YTD surge

As the cryptocurrency community eagerly awaits the approval of a Bitcoin exchange-traded fund (ETF) in the United States, several crypto-linked ETFs have already been making remarkable gains in 2023. One such standout is the VanEck Digital Transformation ETF (DAPP), which has seen a staggering 207% year-to-date (YTD) surge. With its focus on major companies involved in the digital asset economy, DAPP has outperformed other blockchain ETFs like the Global X Blockchain ETF (BKCH) and the Bitwise Crypto Industry Innovators ETF (BITQ).

DAPP’s Impressive Performance:

Launched in April 2021, the VanEck Digital Transformation ETF (DAPP) has quickly become a top performer in the blockchain ETF space. Tracking the MVIS Global Digital Assets Equity Index, DAPP holds top exposure assets such as Coinbase, MicroStrategy, and Block. These companies have experienced significant growth in 2023, with Coinbase shares rising 312% and MicroStrategy shares surging 302% YTD.

Competing ETFs:

While DAPP leads the pack, other blockchain ETFs have also seen substantial gains in 2023. The Global X Blockchain ETF (BKCH) and the Bitwise Crypto Industry Innovators ETF (BITQ) have surged nearly 203% and 192% YTD, respectively, according to VettaFi. However, it’s worth noting that VettaFi’s performance data differs significantly from TradingView’s data, with discrepancies of up to 50% in some cases.

Other Top Performers:

Joining the list of top-performing blockchain ETFs in 2023 are the Global X Blockchain & Bitcoin Strategy ETF (BITS) and the iShares Blockchain and Tech ETF (IBLC). Both funds have added over 184% to their YTD value, according to TradingView.

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All-Time Highs and Lows:

While these ETFs have seen impressive returns in 2023, some are still far from their all-time highs. For instance, the VanEck Digital Transformation ETF is down about 77% from its record high of $34, set in November 2021. Conversely, the iShares Blockchain and Tech ETF has been consistently reaching new all-time highs, surpassing its previous peak of $8.4 in November 2023.

Spot Bitcoin ETFs on the Horizon:

Many companies that have achieved success with their blockchain industry-themed ETFs in 2023, including VanEck, Bitwise, and Global X, are now seeking approval for a spot Bitcoin ETF. Unlike blockchain-themed ETFs, which focus on companies involved in the digital asset economy, a spot Bitcoin ETF aims to provide direct exposure to the price of Bitcoin by holding the actual cryptocurrency.

VanEck’s Fifth Amended Application:

In a bid to secure approval for its spot Bitcoin ETF, VanEck recently filed a fifth amended application with the U.S. Securities and Exchange Commission. The company, along with Bitwise, predicts that a spot Bitcoin ETF will be approved in 2024 and become the “most successful ETF launch of all time.”

Conclusion:

As the crypto market continues to evolve, crypto-linked ETFs have emerged as a profitable investment avenue. VanEck’s Digital Transformation ETF (DAPP) and other blockchain ETFs have demonstrated impressive growth in 2023, outperforming expectations. While the approval of a spot Bitcoin ETF remains uncertain, companies like VanEck, Bitwise, and Global X are actively pursuing this opportunity, anticipating a groundbreaking launch in 2024. The success of these ETFs highlights the growing interest and potential within the cryptocurrency industry, as investors seek diversified exposure to this rapidly expanding market.

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