In the first half of 2023, ETFs that invest in equities of companies involved in the cryptocurrency or digital assets space perform best. Valky Bitcoin Miners ETF surges over 191% while VanEck Digital Transformation ETF soars 155%.
Bitcoin is up 85% year to date, edging towards $31,000 on institutional demand.
The attempts by financial titans to launch ETFs, as well as other signs of institutional crypto interest, have helped to extend Bitcoin’s 2023 rebound to 84%. In addition, a global cycle of monetary tightening is closer to an end, easing some of the worst fears about the drag on sentiment from rising rates.
In a recent note on digital assets, Bank of America (BoA) said it expects the asset class to be supported by regulatory clarity “over the intermediate term”.
Digital assets are one of the best-performing asset classes this year, up 33% to 20 June, ahead of stocks (14%), gold (6%) and investment grade bonds (4%), according to BoA.
“The finishing line for the Fed’s rate hiking cycle is in sight,” said Tony Sycamore, a market analyst at IG Australia Pty. He expects Bitcoin to climb in the third quarter and has an initial target of $32,375 based on chart patterns.
“It’s particularly significant that BTC and crypto have rallied during a period where just about everything negative one could imagine for the space has happened,” said Stephane Ouellette, chief executive of FRNT Financial Inc, an institutional platform focused on digital assets. “For it to rally during such a difficult period for sentiment, it is encouraging to think what will happen if a string of positive announcements happens in the space.”
Bitcoin, began the year trading at around $16,000 and has outpaced major stock indexes to start the year — by a big margin. The 85% gain has been a remarkable display of force for an asset that many had written off as being on its last legs. Partly, the rally can be chalked up to other risky assets, including US stocks, also advancing as the bulk of Federal-Reserve tightening seems to have already happened.
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