The technology sector had its best January in decades. The bets that the Fed might slow down the rate hike plan have propelled the surge in the tech stocks, as inflation is cooling, wage growth is decelerating and consumer confidence is increasing. A pause in interest rate increases is a positive sign for technology stocks.
While most ETFs in the space are surging, Valkyrie Bitcoin Miners ETF (WGMI - Free Report) is stealing the show with a 112.1% jump. This is followed by gains of 87.8% for VanEck Digital Assets Mining ETF , 77.5% for VanEck Vectors Digital Transformation ETF (DAPP - Free Report) , 73.1% for Global X Blockchain ETF (BKCH - Free Report) and 72.6% for Bitwise Crypto Industry Innovators ETF (BITQ - Free Report) .
As the tech sector relies on borrowing for superior growth, it is cheaper to borrow more money for further initiatives when interest rates are low. The latest action by the Fed signals that it could be closer to pausing its current rate-hiking campaign. The central bank lifted its benchmark interest rate by 0.25 percentage points to 4.5-4.75% in the latest meeting (read: 5 ETFs to Ride On as Nasdaq Clocks Best January in 20 Years).
The Fed’s smaller rate increase after its first monetary policy meeting of the year reflects growing confidence that inflation is on a downward trajectory after several months of encouraging data. The Fed noted that recent indicators pointed to modest growth in spending in production, while job gains remained robust in recent months. Moderating inflation, rising GDP growth and a resilient jobs market indicate that the economy is holding steady and might remain strong.
The Fed appears to be approaching a point at which it can consider pausing interest-rate increases. Chair Jerome Powell said that "the disinflationary process has started" in the world's largest economy, although he signaled that interest rates would continue to rise and cuts were not in the offing.
Further, investors have jumped in to buy the most beaten-down stocks of 2022. The Nasdaq had its fourth-worst year on record and worst since 2008. The Nasdaq is statistically highly oversold versus the S&P 500 right now, per various market participants.
Let’s dig into the details of the above-mentioned ETFs:
Valkyrie Bitcoin Miners ETF (WGMI - Free Report)
Valkyrie Bitcoin Miners ETF is an actively managed ETF providing exposure to the bitcoin mining industry. WGMI invests at least 80% of its net assets (plus borrowings for investment purposes) in securities of companies that derive at least 50% of their revenues or profits from bitcoin mining operations and/or from providing specialized chips, hardware and software or other services to companies engaged in bitcoin mining (read: Bitcoin ETF Wins in January: 5 Best Stocks).
Valkyrie Bitcoin Miners ETF holds 20 stocks in its basket and charges 75 bps in annual fees. It has amassed $3.8 million in its asset base while trading in an average daily volume of 13,000 shares.
VanEck Digital Assets Mining ETF
VanEck Digital Assets Mining ETF offers exposure to companies participating in the digital assets mining economy by tracking the MVIS Global Digital Assets Mining Index. It holds 20 stocks in its basket with a well-diversified portfolio, as each accounts for no more than 9% share.
VanEck Digital Assets Mining ETF has attracted $1.3 million in its asset base. It charges 50 bps in annual fees and trades in volume of under 2,000 shares per day on average (read: 5 Winning ETF Ideas for Your Portfolio in 2023).
VanEck Vectors Digital Transformation ETF (DAPP - Free Report)
VanEck Vectors Digital Transformation ETF aims to offer exposure to companies that are at the forefront of the digital asset transformation, such as digital asset exchanges, payment gateways, digital asset mining operations, software services, equipment and technology or services to the digital asset operations, digital asset infrastructure businesses or companies facilitating commerce with the use of digital assets. VanEck Vectors Digital Transformation ETF tracks the MVIS Global Digital Assets Equity Index and holds 20 securities in its basket.
VanEck Vectors Digital Transformation ETF charges 50 bps in annual fees and trades in an average daily volume of 101,000. DAPP has accumulated $28.3 million in its asset base.
Global X Blockchain ETF (BKCH - Free Report)
Global X Blockchain ETF seeks to invest in companies positioned to benefit from the increased adoption of blockchain technology, including companies in digital asset mining, blockchain & digital asset transactions, blockchain applications, blockchain & digital asset hardware, and blockchain & digital asset integration. Global X Blockchain ETF holds 24 stocks in its basket, with a double-digit allocation to the three top firms.
Global X Blockchain ETF has gathered $59.8 million in its asset base and trades in an average daily volume of 124,000 shares. It charges 50 bps in annual fees.
Bitwise Crypto Industry Innovators ETF (BITQ - Free Report)
Bitwise Crypto Industry Innovators ETF offers exposure to the companies leading the new crypto economy. It tracks the Bitwise Crypto Innovators 30 Index, which measures the performance of the 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.
Holding 27 stocks in its basket, Bitwise Crypto Industry Innovators ETF is concentrated on the top three firms, with nearly double-digit exposure each. It charges 85 bps in annual fees from investors and trades in an average daily volume of 144,000 shares. Bitwise Crypto Industry Innovators ETF has attracted $53.2 million in its asset base.
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The technology sector had its best January in decades. The bets that the Fed might slow down the rate hike plan have propelled the surge in the tech stocks, as inflation is cooling, wage growth is decelerating and consumer confidence is increasing. A pause in interest rate increases is a positive sign for technology stocks.
While most ETFs in the space are surging, Valkyrie Bitcoin Miners ETF (WGMI - Free Report) is stealing the show with a 112.1% jump. This is followed by gains of 87.8% for VanEck Digital Assets Mining ETF , 77.5% for VanEck Vectors Digital Transformation ETF (DAPP - Free Report) , 73.1% for Global X Blockchain ETF (BKCH - Free Report) and 72.6% for Bitwise Crypto Industry Innovators ETF (BITQ - Free Report) .
As the tech sector relies on borrowing for superior growth, it is cheaper to borrow more money for further initiatives when interest rates are low. The latest action by the Fed signals that it could be closer to pausing its current rate-hiking campaign. The central bank lifted its benchmark interest rate by 0.25 percentage points to 4.5-4.75% in the latest meeting (read: 5 ETFs to Ride On as Nasdaq Clocks Best January in 20 Years).
The Fed’s smaller rate increase after its first monetary policy meeting of the year reflects growing confidence that inflation is on a downward trajectory after several months of encouraging data. The Fed noted that recent indicators pointed to modest growth in spending in production, while job gains remained robust in recent months. Moderating inflation, rising GDP growth and a resilient jobs market indicate that the economy is holding steady and might remain strong.
The Fed appears to be approaching a point at which it can consider pausing interest-rate increases. Chair Jerome Powell said that "the disinflationary process has started" in the world's largest economy, although he signaled that interest rates would continue to rise and cuts were not in the offing.
Further, investors have jumped in to buy the most beaten-down stocks of 2022. The Nasdaq had its fourth-worst year on record and worst since 2008. The Nasdaq is statistically highly oversold versus the S&P 500 right now, per various market participants.
Let’s dig into the details of the above-mentioned ETFs:
Valkyrie Bitcoin Miners ETF (WGMI - Free Report)
Valkyrie Bitcoin Miners ETF is an actively managed ETF providing exposure to the bitcoin mining industry. WGMI invests at least 80% of its net assets (plus borrowings for investment purposes) in securities of companies that derive at least 50% of their revenues or profits from bitcoin mining operations and/or from providing specialized chips, hardware and software or other services to companies engaged in bitcoin mining (read: Bitcoin ETF Wins in January: 5 Best Stocks).
Valkyrie Bitcoin Miners ETF holds 20 stocks in its basket and charges 75 bps in annual fees. It has amassed $3.8 million in its asset base while trading in an average daily volume of 13,000 shares.
VanEck Digital Assets Mining ETF
VanEck Digital Assets Mining ETF offers exposure to companies participating in the digital assets mining economy by tracking the MVIS Global Digital Assets Mining Index. It holds 20 stocks in its basket with a well-diversified portfolio, as each accounts for no more than 9% share.
VanEck Digital Assets Mining ETF has attracted $1.3 million in its asset base. It charges 50 bps in annual fees and trades in volume of under 2,000 shares per day on average (read: 5 Winning ETF Ideas for Your Portfolio in 2023).
VanEck Vectors Digital Transformation ETF (DAPP - Free Report)
VanEck Vectors Digital Transformation ETF aims to offer exposure to companies that are at the forefront of the digital asset transformation, such as digital asset exchanges, payment gateways, digital asset mining operations, software services, equipment and technology or services to the digital asset operations, digital asset infrastructure businesses or companies facilitating commerce with the use of digital assets. VanEck Vectors Digital Transformation ETF tracks the MVIS Global Digital Assets Equity Index and holds 20 securities in its basket.
VanEck Vectors Digital Transformation ETF charges 50 bps in annual fees and trades in an average daily volume of 101,000. DAPP has accumulated $28.3 million in its asset base.
Global X Blockchain ETF (BKCH - Free Report)
Global X Blockchain ETF seeks to invest in companies positioned to benefit from the increased adoption of blockchain technology, including companies in digital asset mining, blockchain & digital asset transactions, blockchain applications, blockchain & digital asset hardware, and blockchain & digital asset integration. Global X Blockchain ETF holds 24 stocks in its basket, with a double-digit allocation to the three top firms.
Global X Blockchain ETF has gathered $59.8 million in its asset base and trades in an average daily volume of 124,000 shares. It charges 50 bps in annual fees.
Bitwise Crypto Industry Innovators ETF (BITQ - Free Report)
Bitwise Crypto Industry Innovators ETF offers exposure to the companies leading the new crypto economy. It tracks the Bitwise Crypto Innovators 30 Index, which measures the performance of the 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.
Holding 27 stocks in its basket, Bitwise Crypto Industry Innovators ETF is concentrated on the top three firms, with nearly double-digit exposure each. It charges 85 bps in annual fees from investors and trades in an average daily volume of 144,000 shares. Bitwise Crypto Industry Innovators ETF has attracted $53.2 million in its asset base.
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