<\/p>\n
Though crypto-related ETFs have notched better year-to-date returns than virtually every fund segment, investors appear to be wary of such products.\u00a0<\/p>\n
The Valkyrie Bitcoin Miners ETF (WGMI) has returned 196% so far this year, according to VettaFi\u2019s ETF Database \u2014 ranking fifth across all ETFs, crypto-related or otherwise.<\/p>\n
Yet WGMI\u2019s assets under management remain relatively low at $21 million, despite tripling in size since Jan. 1.\u00a0<\/p>\n
But a more striking example, perhaps, is the Invesco Alerian Galaxy Crypto Economy ETF<\/a> (SATO), which has only attracted about $5 million in assets since launching in October 2021. That fund is up 151% year to date, VettaFi data<\/a> shows, good for 12th-best among all ETFs.<\/p>\n Invesco, a fund giant known for its Nasdaq 100-focused QQQ ETF, manages neary $1.6 trillion in assets. It partnered with crypto firm Galaxy<\/a> in 2021, noting its strategy to team up with \u201csubject\u2013matter experts.\u201d But neither the combination of an ETF giant and crypto-native firm, nor the performance, has attracted investors.<\/p>\n Meanwhile, the largest crypto equity ETF, the Amplify Transformational Data Sharing ETF (BLOK), lost assets despite year-to-date returns of 51%.<\/p>\n Read more: <\/strong>Inside BLOK ETF: \u2018We use the miners to play offense and defense\u2019<\/a><\/p>\n BLOK, which has roughly $500 million in assets, saw net outflows of about $85 million in 2022 and has lost another $26 million in assets so far in 2023.<\/p>\n The ProShares Bitcoin Strategy ETF (BITO) \u2014 a fund that holds bitcoin futures contracts, not crypto-related equities \u2014 has been an outlier of sorts. Returning about 70% so far this year, it has net inflows of $325 million since the start of 2023. Its assets under management are nearly $1.1 billion, higher than any other US crypto ETF.\u00a0\u00a0<\/p>\n Strong performance over a relatively short period of time isn\u2019t enough to drive money into ETFs, according to Sumit Roy, senior analyst at ETF.com. The exception, he added, is if there is \u201ca convincing narrative\u201d that compels investors to buy.<\/p>\n \u201cRight now, we don\u2019t have that; in fact, it\u2019s the opposite,\u201d Roy told Blockworks. \u201cMany investors are wary that regulation might hurt the stocks within these funds, and they\u2019re worried that cryptocurrency prices will stay depressed.\u201d<\/p>\n Common top-10 holdings in funds such as WGMI, SATO and BLOK include bitcoin miners CleanSpark, Marathon Digital and Riot Platforms. The SEC sued Coinbase<\/a>, a top stock in SATO and BLOK, in June.\u00a0<\/p>\n Though BTC is up roughly 72% year to date, it is down more than 5% in the past month and down nearly 60% from its all-time high reached in November 2021.<\/p>\n Neena Mishra, director of ETF research at Zacks Investment Research, said crypto ETFs have benefitted from the rebound of crypto prices as well as hype around artificial intelligence.<\/p>\n But some don\u2019t want to get burned again, she added.\u00a0<\/p>\n \u201cCrypto-related funds were among 2022\u2019s worst performers,\u201d Mishra told Blockworks. \u201cMany investors who lost a lot of money simply gave up on the asset class.\u201d<\/p>\n BLOK\u2019s total return in 2022 was about -62%, according<\/a> to YCharts.com.<\/p>\n Funds tied to commodities, alternative energy and tech have historically delivered strong returns, only to see limited interest from investors because those investors were hurt by previous crashes, Roy noted.<\/p>\n Others, such as the Breakwave Dry Bulk Shipping ETF (BDRY), surged more than 280% in 2021, but did not see much interest from investors, Mishra recalled. BDRY was too volatile for some investors, she added, and some did not fully understand the theme.<\/p>\n \u201cThat doesn\u2019t mean that we will never see inflows into these [crypto] ETFs, though,\u201d Roy said. \u201cIf the funds keep rallying and cryptocurrency prices near their highs or make new highs, then the narrative could shift and money could start pouring in.\u201d<\/p>\n Hopes for spot bitcoin ETFs have been \u201ca double-edged sword\u201d for US crypto-focused ETFs, Mishra said.\u00a0<\/p>\n Roy noted that \u201cmoney could be waiting on the sidelines\u201d for a spot bitcoin ETF amid \u201cgrowing excitement\u201d that one could launch soon.<\/p>\n Such approval hopes became higher, for some, after asset management titan BlackRock entered the race to launch such a product in June.\u00a0<\/p>\n The exchanges that would list the latest wave of proposed US bitcoin ETFs have sought to address SEC concerns by noting in filings they have \u201creached an agreement on terms\u201d with Coinbase<\/a> to enter into a surveillance-sharing agreement<\/a> (SSA).<\/p>\n Though the SEC delayed its decision<\/a> on a proposed ETF by Ark Invest and 21Shares last week, the regulator has a slate of others to rule on<\/a> \u2014 or say it needs more time to review \u2014 in the coming weeks.\u00a0<\/p>\n \u201cWhile all crypto-related assets have benefited from the rising odds of approval of spot ETFs, many investors are now simply waiting for pure exposure rather than investing in related ETFs,\u201d Mishra said.<\/p>\n Get the day\u2019s top crypto news and insights delivered to your email every evening.\u00a0Subscribe to Blockworks\u2019 free newsletter<\/a>\u00a0now.<\/strong><\/p>\n Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can\u2019t-miss tweets and more from\u00a0Blockworks Research\u2019s Daily Debrief<\/a>.<\/strong><\/p>\n Can\u2019t wait? Get our news the fastest way possible.\u00a0Join us on Telegram<\/a>\u00a0and follow us on\u00a0Google News<\/a>.<\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" Though crypto-related ETFs have notched better year-to-date returns than virtually every fund segment, investors appear to be wary of such products.\u00a0 The Valkyrie Bitcoin Miners ETF (WGMI) has returned 196% so far this year, according to VettaFi\u2019s ETF Database \u2014 ranking fifth across all ETFs, crypto-related or otherwise. Yet WGMI\u2019s assets under management remain relatively […]<\/p>\n","protected":false},"author":2,"featured_media":139840,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[230,225,221,227,226,228,229,60,223,224,222],"class_list":["post-139839","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-brave","tag-coinbase","tag-crypto","tag-decentralised","tag-decentralized","tag-decentralized-exchange","tag-erc-20","tag-featured","tag-meme-coin","tag-robinhood","tag-solana"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/139839","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=139839"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/139839\/revisions"}],"predecessor-version":[{"id":147556,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/139839\/revisions\/147556"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/139840"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=139839"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=139839"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=139839"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}More than just performance<\/h2>\n
The elephant in the room<\/h2>\n
\n