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. 31 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.
“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.”
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, with $59.4 million; it’s up 64.05% 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.