Last week, cryptocurrency-linked exchange-traded funds (ETFs) stole the show, showing impressive gains despite falling cryptocurrency prices. Among them, Ethereum and Bitcoin stood out as the best performers, captivating investors’ attention amid market volatility.
The rise of digital currency funds was notable, with eight of the top 10 ETFs recording significant increases in value. Leading the charge were Ethereum futures funds, with notable performers including the ProShares Ether Strategy ETF (EETH), which has nearly $70 million in assets and a notable 12% increase in value. Similarly, the Ark21Shares Active Ethereum Futures Strategy ETF (ARKZ) and the Bitwise Ethereum Strategy ETF (AETH) saw a 12% rise in the same period. Additionally, the combined bitcoin and ethereum futures fund, the ARK 21Shares Active Bitcoin Ethereum Strategy ETF (ARKY), saw an increase of 11%, according to data from etf.com.
While crypto ETFs soared, traditional funds saw mixed fortunes, with notable inflows into the Vanguard 500 Index Fund (VOO) contrasting with significant outflows from the iShares Core S&P 500 ETF (IVV).
Despite the impressive performance of cryptocurrency ETFs, the broader market witnessed a drop in the two largest cryptocurrencies. Ethereum saw a 17% drop, while Bitcoin fell 12% over the past week, according to CoinMarketCap.com.
Analysts caution against attributing the rise of crypto ETFs solely to the SEC’s approval process for a spot Ethereum exchange-traded fund. While several issuers have applied for such ETFs, analysts remain skeptical about their approval before the upcoming May deadline.
In addition to regulatory developments, investors are closely monitoring the impending bitcoin halving, which is expected to occur this week. The anticipation surrounding this event has contributed to the impressive performance of Bitcoin, which has risen more than 50% since the beginning of the year, driven in part by the approval of 10 spot bitcoin ETFs in mid-January, collectively amassing approximately $60 billion in assets.
Amid the cryptocurrency boom, two carbon allowance ETFs, namely the iPath Series B Carbon ETN ETF and the KraneShares European Carbon Allowance Strategy ETF, also saw significant gains of around 10% last week, further diversifying the ETF investment landscape.
Also read: April 2024 Top 3 Essential Cryptocurrencies for Explosive Growth