“Bitcoin is up 40% year to date, so it is driving demand for the underlying stocks,” said Mohit BajajWallachBeth, Head of ETFs Capital. “These stocks are also often traded in unison, so when there is overbought, it will cause some higher price divergences.”
This is especially good news for crypto ETFs, which suffered some of the worst losses of the year in 2022. The price of the coin has recently fallen to $23,000, just below its 2021 peak close to $69,000. An increase in optimism and FOMO sentiment has caused many cryptocurrencies to surge. Other crypto-related funds, such as the VanEck Digital Assets Mining (DAM) ETF, VanEck Digital Transformation (DAPP) ETF, Global X Blockchain (BKCH) ETF, and the Bitwise Crypto Industry Innovators (BITQ) ETF, have also registered hikes greater than 60%.
However, many people who saw cryptos and related assets soar in the early years of the pandemic, only to crash in 2022, remain wary of any sudden moves. “It’s been a steady stream of bad news that has plagued the industry,” said Kara Murphy, Chief Investment Officer at Kestra Investment Management. “It allowed them to be part of the infrastructure. What happened to the miners? is a great example of how that approach didn’t work out.”
“When you have an asset that’s declining significantly and it’s being called into question, everyone gets dragged down with it,” Murphy said in an interview. “Bitcoin has been on the mend so it’s not completely dead and forgotten, but miners have been hit by plunging assets and questions about infrastructure.”
Crypto devotees are trying to keep the faith in the coin, even as the industry is going through one of its darkest phases and in the aftermath of FTX’s implosion.
