ETFs in Focus as Bitcoin Tops $105K Ahead of Trump's Inauguration

Bitcoin surged past $105,000 on Friday, marking a significant milestone in the new year. This rally, fueled by reports that President-elect Donald Trump may prioritize cryptocurrencies as a "national priority," has reignited interest in crypto exchange-traded funds (ETFs), as quoted on investors.com.

Crypto ETFs Rally Amid Policy Hopes

Reports of Trump’s potential crypto-friendly policies lifted several crypto ETFs that have been recovering since Wednesday’s cooler inflation data. This rebound followed a sharp sell-off caused by concerns over the Fed possibly delaying rate cuts after a strong jobs report.

Outflows from Bitcoin ETFs totaled $582 million last week, according to CoinDesk, as quoted on investors.com. However, optimism surrounding Trump’s pro-crypto stance has sustained momentum. Notably, his proposed nomination of crypto-friendly lawyer Paul Atkins to head the SEC could further support the sector.

Hut8 and Meta’s AI Partnership Fuels Optimism

Bitcoin miner Hut8 HUT announced plans to build a $12 billion artificial intelligence data center in Louisiana, potentially in partnership with Meta Platforms META. This collaboration could strengthen the connection between blockchain technology and AI, driving further interest in crypto-related investments.

Advantages and Risks of Crypto ETFs

Crypto ETFs provide a way to hold diversified digital currencies and stocks such as Coinbase COIN, Marathon Digital Holdings MARA, MicroStrategy MSTR and Riot Platforms RIOT. Crypto ETFs offer high liquidity compared to some cryptocurrencies and exposure to Bitcoin or other coins without direct ownership risks. However, price volatility of underlying coins, regulatory hurdles remain key concerns.

Bitcoin ETF Performance and Technical Analysis

ProShares Bitcoin ETF BITO

The ETF BITO tracks bitcoin futures and climbed above its 50-day moving average during a four-day winning streak. Relative Strength Rating surged to 86 from 42 in just three months, as quoted on investors.com.

VanEck Digital Transformation ETF DAPP

The underlying MVIS Global Digital Assets Equity Index is a rules-based, modified capitalization-weighted, float-adjusted index intended to give investors a means of tracking the overall performance of the global digital asset segment. The ETF DAPP holds Coinbase, Block, MicroStrategy and Core Scientific. The ETF charges 51 bps in fees and yields 3.47% annually.

Amplify Transformational Data Sharing ETF BLOK

Diversified portfolio with top holdings in Coinbase, Core Scientific, MicroStrategy, and CleanSpark. Recently regained its 50-day moving average. The ETF BLOK yields 5.39% annually and charges 76 bps in fees.

Bitwise Crypto Industry Innovators ETF BITQ

The underlying Bitwise Crypto Innovators 30 Index measures the performance of 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. It broke out in October but fell below the 50-day line by the year-end. Shares rebounded above the 50-day line last week, driven by renewed optimism, as quoted on investors.com.

Valkyrie Bitcoin Miners ETF WGMI

WGMI holds stocks like CleanSpark, Bitfarms, Hive Blockchain and NVIDIA. Reversed gains from a 28% surge but reclaimed the 50-day line, offering another potential entry point. The ETF charges 75 bps in fees.

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