ETFs Riding High On Bitcoin Surge

After being hurt by regulatory crackdowns in China and Russia, and criticism from major Wall Street leaders last month, bitcoin regained its astronomical surge in recent sessions. The cryptocurrency skyrocketed from below $3,000 to a new high of above $5,900 today in less than a month, representing nearly 500% surge this year. For the week, bitcoin is up more than 30%.

With this, the total market capitalization of the digital currency reached $97 billion and accounts for more than 55% of the total cryptocurrencies market.

Most of the rally was driven by investors’ enthusiasm in receiving the offshoot coins from a scheduled split in November. In early August, the split of the digital currency into bitcoin and bitcoin cash resulted in an equal amount of new coin to investors. Additionally, the speculation of resuming bitcoin trading in China by licensing exchanges for cryptocurrencies is lending further strength. Moreover, strong demand from Japan and rising institutional investor interest continue to push up the price of bitcoin.

Meanwhile, reports of Goldman Sachs (NYSE:GS) exploring a bitcoin trading operation have kept the space buoyant. If this wasn’t enough, bitcoin is gradually becoming a safe-haven currency as tensions between North Korea and the United Stated as well as political crisis in Spain's Catalonia region has spurred a rally in the digital currency (read: Bitcoin Update: Goldman Trading & ETF Filings).

The trend is likely to continue with most researchers and analysts giving bullish calls. The former Fortress Investment Group manager, Michael Novogratz, sees bitcoin price to rise over $10,000 in the next six to 10 months, largely because of heavy investor interest. Going forward, many analysts believe a better and mature regulatory environment will be a huge boon to the digital currency, leading to an increased investment in the booming cryptocurrency with a growing number of retail investors.

Investors seeking to ride the surge and increased optimism surrounding cryptocurrency should invest in ETFs. Though none of the filled bitcoin ETFs have received approval until now, the popularity and success of bitcoin is driving the following ETFs.

ARK Web x.0 ETF ARKW

ARKW is the first ETF to add bitcoin to its roster. This is an actively managed fund focusing on companies that are expected to benefit from the shift in technology infrastructure to the cloud, enabling mobile, new and local services. The fund holds 43 stocks in its basket with none holding more than 6.3% share. The ETF has amassed $103.5 million in its asset base and trades in a lower average daily volume of around 52,000 shares. The expense ratio comes in at 0.75%. The ETF is up 66.2% in the year-to-date time frame (see: all the Technology ETFs here).

ARK Innovation ETF (KW:ARKK)

This is also an actively managed fund focusing on companies that are expected to benefit from the development of new products or services, technological improvement and advancements in genomic revolution, Web x.0 and industrial innovation. The fund holds 54 stocks in its basket, with each holding no more than 6% share. It has AUM of $178.8 million and trades in a moderate average daily volume of around 73,000 shares. The product charges 75 bps in annual fees and has gained 74.2% so far this year.

iShares PHLX Semiconductor ETF SOXX

Semiconductor ETFs are gaining from rising demand of cryptocurrency mining, which needs the usage of semiconductors. SOXX follows the PHLX SOX Semiconductor Sector Index and offers exposure to 30 firms with none holding more than 8.25% of assets. The fund has amassed $1.3 billion in its asset base and trades in a solid average volume of around 502,000 shares a day. It charges 48 bps in fees a year from investors and has surged 34.7% so far this year. It has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook (read: 5 Winning ETF Strategies for Q4).

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ISHARS-PHLX SEM (SOXX): ETF Research Reports

ARK- WEB XO ETF (ARKW): ETF Research Reports

ARK-INNOVATION (ARKK): ETF Research Reports

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