What Is Driving Crypto ETFs’ Surprise Rally?

What Is Driving Crypto ETFs’ Surprise Rally?

Some of last year’s worst performers emerge as the ‘fastest-growing' sectors of the tech space.

Reviewed by: Heather Bell
Edited by: Heather Bell

The worst exchange-traded fund performers of 2022 have seen a reversal this year that is putting them at the top of the leaderboard in terms of performance. All 10 of the best-performing ETFs in 2023 as of Jan. 25 invest in equities of companies involved in the cryptocurrency or digital assets space.  

Bitcoin started out 2022 trading above $46,000, but collapsed to trade below $16,000. It has since rebounded above $23,000, which seems to have helped lift equity funds tied to the cryptocurrency space.  

Two of the funds among last year’s worst performers, the Viridi Bitcoin Miners ETF (RIGZ) and the Volt Crypto Industry and Equity ETF (BTCR), closed in the early days of 2023, but the VanEck Digital Transformation ETF (DAPP), which ended 2022 down more than 85%, has bounced back by 74.4% so far this year. However, it’s the Valkyrie Bitcoin Miners ETF (WGMI), which launched in February 2022, that’s leading the way so far, with a gain of 94.4%. 

“Digital assets have sold off significantly more than the broader market, so we hit a point where we exhausted most of the selling pressure,” said Spencer Bogart, general partner at Blockchain Capital, in an email.  

“Meanwhile, there is a very significant sum of dry powder [capital] among industry-focused funds that is earmarked for deployment to these opportunities. This led to a situation over the past few weeks where buyers finally outsized sellers, leading to a bounce in digital asset prices.”


TickerFundYTD Return
WGMIValkyrie Bitcoin Miners ETF+94.42%
DAMVaneck Digital Asset Mining ETF+74.41%
DAPPVanEck Digital Transformation ETF+66.67%
BKCHGlobal X Blockchain ETF+62.34%
BITQBitwise Crypto Industry Innovators ETF+60.18%
IBLCiShares Blockchain And Tech ETF+54.69%
SATOInvesco Alerian Galaxy Crypto Economy ETF+52.97%
GFOFGrayscale Future of Finance ETF+46.89%
FDIGFidelity Crypto Industry And Digital Payments ETF+43.25%
NFTZDefiance Digital Revolution ETF+39.00%


These 10 top-performing ETFs are up between 39% and 94% during the first 16 or so trading days of the year, according to Bloomberg data. The positive performance could be driven by optimism about the prospects for cryptocurrency going forward, or the belief that interest rate hikes will get smaller and end, or at least pause after the February Fed meeting.  

“The most beaten-down assets of 2022—crypto being one of the hardest-hit—are rebounding in 2023 due to a combination of bargain buying and expectations that the Fed is very close to the end of its rate-hiking campaign,” said ETF.com Senior Analyst Sumit Roy.  

Still, these funds remain beaten down after the bloodbath that was 2022, so they are struggling for assets. Six of them have assets below $10 million. The largest fund on the list is the Global X Blockchain ETF (BKCH), with $59.4 million; it’s up 62.3% year to date.  

Fund flows have been mostly flat, with only two funds, WGMI and BKCH, pulling in more than $1 million so far in 2023.  

“At the end of the day, digital assets, crypto and blockchain remain one of the fastest-growing subsectors of the broader tech market,” Bogart added. 


Contact Heather Bell at [email protected] 

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.