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Bitcoin, the largest digital currency by market value, topped $25,000 for the first time since mid-2022. It jumped 8.2% on Feb 16, marking the biggest one-day gain in about a month. The solid rally is the result of the type of short squeeze that historically sent Bitcoin prices higher. Per the data from crypto data provider Coinglass, investors liquidated some $60 million of bitcoin short positions over the past 24 hours.

Investors looking to ride the bitcoin rally could consider ETFs like ProShares Bitcoin Strategy ETF (BITO - Free Report), Bitwise Crypto Industry Innovators ETF (BITQ - Free Report), VanEck Bitcoin Strategy ETF (XBTF - Free Report), Valkyrie Bitcoin Strategy ETF (BTF - Free Report) and Valkyrie Bitcoin Miners ETF (WGMI - Free Report). These funds might see massive trading volumes in the days ahead, given the bullish fundamentals.

The crypto rally came as a surprise amid the increased regulatory scrutiny from U.S. authorities on digital currencies. Early this week, the New York State Department of Financial Services directed Paxos Trust Co. to stop issuing new tokens of crypto’s third largest stablecoin, a Binance-branded coin known as BUSD that has roughly $16 billion in circulation.

A stablecoin is a type of cryptocurrency pegged to a real-world asset and some are backed by assets such as bonds or cash. They are used for trading in and out of different cryptocurrencies, as a trader does not need to convert money back to fiat currencies. BUSD is pegged one-to-one to the U.S. dollar.

There are increasing signs that the crypto market bottomed last November and has turned bullish. Any bad news is being shrugged off, signaling that the worst is over.

With the latest gains, Bitcoin is up more than 46% from the year's low of $16,496 on Jan 1. The upbeat stock market with the return of risk-on trading is driving the cryptocurrency higher. Bitcoin is closely correlated to the tech-heavy Nasdaq Composite index, which is up about 16% year to date. Bets that that Fed will soon wrap up its inflation-fighting campaign added to the strength.

ProShares Bitcoin Strategy ETF (BITO)

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 AUM of $727.7 million and an average trading volume of 7 million shares.

ProShares Bitcoin Strategy ETF charges 95 bps in annual fees.

Bitwise Crypto Industry Innovators ETF (BITQ)

Bitwise Crypto Industry Innovators ETF offers exposure to the companies leading the new crypto economy. It tracks the Bitwise Crypto Innovators 30 Index, which measures the performance of the companies involved in servicing the cryptocurrency markets, including crypto mining firms, crypto mining equipment suppliers, crypto financial services companies, or other financial institutions servicing primarily crypto-related clientele.

Holding 27 stocks in its basket, Bitwise Crypto Industry Innovators ETF is concentrated on the top two firms. It charges 85 bps in annual fees from investors and trades in an average daily volume of 148,000 shares. Bitwise Crypto Industry Innovators ETF has attracted $54.5 million in its asset base.

VanEck Bitcoin Strategy ETF (XBTF)

VanEck Bitcoin Strategy ETF seeks capital appreciation by investing in bitcoin futures contracts. It is actively managed and offers exposure to bitcoin-linked investments through an accessible exchange-traded vehicle. XBTF does not invest in bitcoin or other digital assets directly and charges 65 bps in annual fees.

VanEck Bitcoin Strategy ETF has amassed $28.1 million in its asset base and trades in volume of 15,000 shares a day on average.

Valkyrie Bitcoin Strategy ETF (BTF)

Valkyrie Bitcoin Strategy ETF is an actively managed ETF available through Nasdaq. It invests in bitcoin futures contracts and does not provide direct exposure to the price of bitcoin. BTF has accumulated $25.2 million in its asset base.

Valkyrie Bitcoin Strategy ETF charges 95 bps in annual fees and trades in volume of 93,000 shares a day on average.

Valkyrie Bitcoin Miners ETF (WGMI)

Valkyrie Bitcoin Miners ETF is an actively managed ETF that will invest at least 80% of its net assets (plus borrowings for investment purposes) in securities of companies that derive at least 50% of their revenues or profits from bitcoin mining operations and/or from providing specialized chips, hardware, and software or other services to companies engaged in bitcoin mining. Valkyrie Bitcoin Miners ETF holds 24 stocks in its basket with a double-digit concentration on the top firm.

Valkyrie Bitcoin Miners ETF has amassed $5.3 million in its asset base while trading in an average daily volume of 41,000 shares. It charges 75 bps in annual fees.

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