Bitcoin On An Unstoppable Rally: 5 Sizzling Hot ETFs

gold-colored Bitcoin

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The rally in the world's largest cryptocurrency is showing no signs of slowdown as Bitcoin topped the $57,000 mark for the first time since December 2021. The cryptocurrency rallied more than 10% in the week, especially in the wake of heavy institutional buying by a software firm, MicroStrategy. So far this year, bitcoin is up about 35%.

The spike in bitcoin has been a boon to major crypto trading venues and the miners. Coinbase Global COIN and Robinhood HOOD jumped 27% and 31%, respectively, while Marathon Digital MARA and Microstrategy gained 32% and 27%, respectively. This has spread strong bullishness in the ETF space as well.

While there are many options available in the space, we have highlighted five that are at the forefront of the Bitcoin rally. These are Grayscale Bitcoin Trust ETF (GBTC - Free Report), Valkyrie Bitcoin Strategy ETF (BTF - Free Report), Bitwise Bitcoin Strategy Optimum Roll ETF (BITC - Free Report), ProShares Bitcoin Strategy ETF (BITO - Free Report) and ARK 21Shares Active Bitcoin Futures Strategy ETF (ARKA - Free Report). All these have gained more than 30% so far this year.

MicroStrategy revealed that it has bought an additional 3,000 bitcoins this month for $155.4 million. The company now owns a total of 193,000 bitcoin coins worth about $10 billion.

Additionally, spot Bitcoin ETFs are a game changer for the cryptocurrency market. The launch of spot Bitcoin ETFs has made it easier for investors to gain exposure to Bitcoin without directly owning the asset, thereby underscoring the potential growth of cryptocurrency in mainstream investment platforms. Investors have poured in about $6.1 billion so far in spot Bitcoin ETFs, which began trading in the United States on Jan 11, signaling widening demand for the token.

ARK Invest, renowned for its optimistic outlook, envisions Bitcoin as a successor to gold as a secure asset, forecasting continued value growth, driven by its increasing integration into the financial ecosystem. It argues that Bitcoin's resilience to economic uncertainties like inflation and interest rate hikes positions it favorably in the current economic environment.

Another contributor to the digital currency’s hot demand is its upcoming “halving” event in April. Halving, which reduces the reward for mining new blocks, has historically been seen as a catalyst for Bitcoin's price.

Let’s delve into the abovementioned ETFs in detail:

Grayscale Bitcoin Trust (GBTC) – Up 46.9%

Grayscale Bitcoin Trust is the world’s largest Bitcoin ETF that enables investors to gain exposure to Bitcoin in the form of security while avoiding the challenges of buying, storing and safekeeping Bitcoin directly. It owns and passively holds actual Bitcoins through the Custodian, Coinbase Custody. Grayscale Bitcoin Trust has an AUM of $22.7 billion and charges 1.50% in annual fees from investors. It trades in heavy volume of more than 26 million shares a day on average.

Valkyrie Bitcoin Strategy ETF (BTF) – Up 21.3%

Valkyrie Bitcoin Strategy ETF is an actively managed ETF available through Nasdaq. It invests primarily in bitcoin and ether futures contracts. BTF has accumulated $42.3 million in its asset base. Valkyrie Bitcoin Strategy ETF charges 124 bps in annual fees and trades in an average daily volume of 98,000 shares (read: Bitcoin ETF (BTF - Free Report) Hits New 52-Week High).

Bitwise Bitcoin Strategy Optimum Roll ETF (BITC) – Up 34.4%

Bitwise Bitcoin Strategy Optimum Roll ETF provides directional exposure to bitcoin via regulated futures contracts and seeks to maximize potential roll returns through a selective analysis of bitcoin futures beyond front or near-month contracts. The fund does not invest directly in Bitcoin. Bitwise Bitcoin Strategy Optimum Roll ETF has attracted $1.3 million in its asset base and charges 85 bps in annual fees.

ProShares Bitcoin Strategy ETF (BITO) – Up 33.7%

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 an AUM of $2.1 billion. ProShares Bitcoin Strategy ETF charges 95 bps in annual fees and trades in an average daily volume of 20 million shares.

ARK 21Shares Active Bitcoin Futures Strategy ETF (ARKA) – Up 33%

ARK 21Shares Active Bitcoin Futures Strategy ETF is an actively managed ETF that targets 100% exposure to bitcoin through investment in bitcoin futures contracts. ARKA aims to outperform BTC by actively rolling its futures contracts.

ARK 21Shares Active Bitcoin Futures Strategy ETF has amassed $11.3 million in its asset base and charges 70 bps in fees per year. It trades in an average daily volume of 18,000 shares.

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Disclosure: contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any ...

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