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First Trust SkyBridge Crypto Industry and Digital Economy ETF CRPT, which provides exposure to the crypto industry and digital economy companies, has soared 96.1%, becoming the best-performing ETF of 2024.
Although most of the stocks in CRPT’s portfolio delivered strong returns this year, a few have gained more than 60%. These are MicroStrategy Incorporated MSTR, NVIDIA Corporation NVDA, Interactive Brokers Group Inc. IBKR, Mastercard Inc. MA and Iris Energy IREN.
Bitcoin, the world's largest cryptocurrency, skyrocketed from around $42,000-$43,000 to a record $1,08,000 early in December. The digital currency soared 140% this year, outperforming traditional investments like stocks, bonds and gold. This resulted from strong investor and institutional demand, Fed rate cuts, and optimism for a cryptocurrency-friendly regulatory environment under President-elect Donald Trump (read: Bitcoin ETFs See $10B Inflows Following Trump Win).
The cryptocurrency market is witnessing a surge in optimism as governments and institutions worldwide increasingly embrace blockchain technology. This shift is paving the way for broader adoption and investment in digital assets, fueling expectations of sustained growth in the years ahead.
The approval of the U.S.-listed Bitcoin ETFs this January played a significant role in Bitcoin’s rise. These funds, previously blocked by the SEC due to investor protection concerns, have allowed a wide range of investors to gain exposure to Bitcoin without directly owning the asset, thereby underscoring the growth potential of cryptocurrency in mainstream investment platforms. Investors are pouring record capital into Bitcoin ETFs. The first options trading for spot bitcoin ETFs also went live on Nov. 19, reflecting growing confidence in Bitcoin ETFs as mainstream adoption increases.
From an institutional point of view, MicroStrategy has been the biggest buyer of Bitcoin throughout the year. This has bolstered enthusiasm in the cryptocurrency markets (read: MicroStrategy to Join Nasdaq-100: Tap MSTR ETFs).
Another big factor is the Fed rate-cutting cycle era. The central bank initiated an easy policy by cutting rates by 50 bps in September. Then, it slashed interest rates by 25 bps each in November and December. Lowered interest rates drive investors to redirect capital to riskier assets like bitcoin.
President-elect Donald Trump has ushered in a new era of friendlier U.S. regulation for cryptocurrency. Trump vowed to make the United States “the crypto capital of the planet.” He also plans to build a national Bitcoin reserve, signaling a strong personal and policy interest in digital assets.
With the United States adopting pro-crypto policies, other countries are shifting toward a more favorable stance. Notably, China has lifted restrictions on personal crypto ownership, marking a significant policy change. Meanwhile, Brazil and Russia are exploring using Bitcoin as part of their reserves, highlighting its expanding role in the global economy. Drawing from historical post-halving performance, analysts anticipate Bitcoin to reach a peak of $150,000 by 2025 (read: 2025 Looks Bright for Bitcoin: ETFs Ready to Gain Big).
Let us take a closer look at the fundamentals of CRPT.