Janice R. Andrews
Within the volatile world of cryptocurrencies, the First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT) saw an incredible rally in February that sent it to the top of the performance charts. With a spectacular 61% increase in value during the month of February, CRPT has drawn the interest of investors globally for its outstanding performance.
Amidst this upswing, a number of equities in CRPT’s portfolio have exhibited exceptional growth, with standout performers reporting gains of more than 50%. Among them are Robinhood Financial LLC (HOOD), CleanSpark (CLSK), Iris Energy (IREN), Coinbase Global (COIN), and Marathon Digital Holdings (MARA).
The world’s largest cryptocurrency, Bitcoin, has had an unstoppable climb that has contributed significantly to the phenomenal increase of CRPT and its member equities. In February, Bitcoin saw a tremendous rise, rising as much as 13% to $63,968 during the trading session on February 28. This was the cryptocurrency’s first time trading above $60,000 since November 2021. With this move, Bitcoin is expected to see its largest monthly gain since December 2020.
The market’s general confidence is driving Bitcoin’s rise, and demand for the currency is growing beyond only ardent digital asset investors. The surge in Bitcoin has been mostly driven by institutional purchases, most notably by MicroStrategy (MSTR), a software company. The recent revelation by MicroStrategy that it spent $155.4 million to buy an extra 3,000 bitcoins in February highlights the increasing interest of institutions in cryptocurrency. MicroStrategy’s strong outlook and overall ownership of 193,000 bitcoins, valued at almost $10 billion, add to the company’s trust in Bitcoin’s future.
Furthermore, the advent of spot Bitcoin ETFs has revolutionized investor access to Bitcoin and ushered in a new era of power in the cryptocurrency market. These exchange-traded funds (ETFs) have made it possible to have more exposure to Bitcoin without having to hold the asset directly, indicating that cryptocurrencies are becoming more and more accepted on traditional financial systems. The recently introduced 11 Bitcoin ETFs have drawn in over $6 billion since its introduction on January 11th, demonstrating the increasing interest of investors in digital assets.
The market optimism around Bitcoin has been further reinforced by the expectation of an impending halving event that would limit the increase of Bitcoin’s supply. This confidence has stimulated speculative interest in other currencies like Ether and Dogecoin in addition to driving Bitcoin’s continuous ascent.
Compared to more conventional assets such as gold and equities, Bitcoin has performed very well in 2024, having gained over 40% so far.
Let’s now examine the foundations of CRPT in more detail:
CRPT in Highlights:
First Trust The carefully crafted SkyBridge Crypto Industry and Digital Economy ETF offers exposure to businesses that are leading the way in innovation in the cryptocurrency, crypto asset, and digital economy sectors. SkyBridge finds securities at the vanguard of the cryptocurrency business ecosystem using a bottom-up research methodology. With thirty equities in its diverse portfolio, CRPT has a large amount of exposure to the top four companies.
The ETF, which charges fees of 85 basis points a year, has collected an amazing $43.6 million in assets and executes 70,000 shares on a daily average.
Top-Performing CRPT Stocks:
- CleanSpark (CLSK): In February, CleanSpark, a bitcoin miner, had an incredible increase of 124.6%, making up 2.9% of the ETF. CleanSpark is rated #2 (Buy) by Zacks Investing with a projected profits growth rate of 81.4% for the fiscal year ending in September 2024.
- Digital Holdings Marathon (MARA): With a 75% increase in February, Marathon Digital—which specializes in digital asset technologies and cryptocurrency mining—now holds a 13.2% stake in the ETF. With a projected 457.4% earnings growth rate for the current year, Marathon Digital is ranked #3 (Hold) on Zacks.
- Global Coinbase (COIN): With a 56.6% gain in February, Coinbase—the biggest cryptocurrency exchange in the United States—now holds a 21.7% stake in CRPT. Coinbase is ranked #1 on Zacks with an expected profits growth rate of 172.9% for this year (Strong Buy).
- Iris Energy (IREN): This month, Iris Energy, a Bitcoin mining firm with an emphasis on sustainable energy, has increased by 54.3%, taking up 1.9% of the CRPT basket. Iris Energy is ranked #3 by Zacks with an anticipated 100.6% earnings growth rate for the fiscal year ending in June 2024.
- HOOD (Robinhood Financial LLC): With a 0.2% stake in the ETF, Robinhood Financial, a licensed broker-dealer that provides cryptocurrency trading services, has increased by 50.2% in February. Robinhood Financial, with an anticipated earnings growth rate of 132.8% for this year, is ranked #3 by Zacks.
The February increase of the Cryptocurrency ETF is proof positive of the increasing importance of digital assets in the investing world. With institutional interest in cryptocurrencies rising to unprecedented levels with Bitcoin at the forefront, the stage is set for more innovation and expansion in this space.
The First Trust SkyBridge Crypto Industry & Digital Economy ETF offers an alluring chance for investors looking to profit from this emerging trend to have diversified exposure to this exciting industry. For investors looking to navigate this fascinating but turbulent terrain, staying up to date on the latest developments and investing possibilities is crucial as the cryptocurrency market continues to expand.
