Better Than Bitcoin? Investors Find A New Gold Mine

When it comes to get-rich-quick assets, Bitcoin price gains are tough to beat. But investors this year are still finding ETFs and related funds that top even the cryptocurrency sensation.


Bitcoin is the most popular digital currency, holding a market value of $916.6 billion, says Coinbase. And it’s also an amazing performer: The price of Bitcoin is up more than 300% over the past 12 months.

But this year, the Bitcoin price gain is getting serious competition from other funds and ETFs betting on even hotter trends. Rival cryptocurrency Ethereum, bulk shipping and traditional energy ETFs plus, ironically, those that invest in offsets to energy are outperforming Bitcoin.

“Bitcoin is rallying as the dollar falls … but cryptocurrency traders have laser eyes for Ethereum,” said Edward Moya, senior market analyst at Oanda, a currency tracking firm. “Ethereum is all the buzz in the cryptoverse.”

Bitcoin Price Gains Set A High Bar

It’s not easy for ETF investors to beat Bitcoin price gains. But they’re finding new gold mines.

For instance, Bitcoin is losing ground to Grayscale Ethereum Classic Trust (ETCG) and Grayscale Ethereum Trust (ETH). Both funds are easily topping the one-year returns of Grayscale Bitcoin Trust (GBTC), rising more than 800% and nearly 600%, respectively.

Grayscale Bitcoin Trust is an investment fund that tracks the price movement of Bitcoin. The fund, which is not technically an ETF, is up roughly 300% in the past 12 months, ranking it No. 5 among all ETFs and related funds by Morningstar.

And just this year, Grayscale Ethereum Classic is up nearly 1,000% and Ethereum Trust rose 343%. The funds own different variations of Ethereum cryptocurrency, explaining the difference in their gains, says Craig Salm, vice president, legal at Grayscale.

Both are leaving Grayscale Bitcoin Trust in the dust. The Bitcoin ETF is is up more than 60% this year. That’s good. But it ranks just No. 26 in Morningstar’s ETF universe. Well behind Ethereum.

Grayscale, though, is still working to convert all these cryptocurrency funds into full ETFs, Salm says. “We are 100% committed to converting GBTC, and our other investment products, into ETFs,” he said. Grayscale hired David LaValle to spearhead the effort.

Shipping: Hotter Than Bitcoin Price Gains?

But don’t think only intangible, high-tech digital currencies can top the run in the Bitcoin price this year. Another big winner is solidly something you can see and touch.

Breakwave Dry Bulk Shipping ETF (BDRY) is rallying due to off-the-charts shipping demand and pricing power for moving physical goods around the world.

The ETF is up more than 255% this year, edging out the gain by the Grayscale Bitcoin Trust in that time. The ETF tracks the charter rate for shipping goods like iron ore, coal and grains using futures contracts.

Energy And Green ETFs Turn It On, Too

The rising Bitcoin price may show demand for a coveted new-age commodity. But traditional commodity assets are proving lucrative, too.

And in another interesting twist for ETF investors this year, there’s plenty of ways to make money both on the soaring prices of energy, but also offsets to help limit its use.

VelocityShares 3x Long Natural Gas ETN (UGAZF), for instance, uses leverage to magnify moves in the underlying commodity. Just this year, the fund is up more than 250%. The  price of Natural Gas based on Nymex contracts is up more than 70% from its 52-week low. Likewise, ProShares Ultra Bloomberg Natural Gas (BOIL) is up strongly, too, rising more than 130% this year.

And here’s the twist. Investors, while scoring big on energy funds, are meanwhile hitting it big with funds designed to help mitigate release of planet-warming carbon into the atmosphere by traditional energy.

The iPath Global Carbon ETF (GRNTF), for instance, is up nearly 90% this year — enough to top the rise in Bitcoin prices. Carbon offsets attract attention as many nations aim to hit carbon neutral by 2050. This ETF tracks the Barclays Global Carbon Index. It uses futures contracts on emission credits companies trade on the European Climate Exchange.

So while Bitcoin is indeed a sensation, it’s not the only way to get big results from funds this year.

Better Than Bitcoin?

Select ETFs, funds outperforming Bitcoin in 2021 so far 

NameTickerYTD total return %Total return %, 12 months
Grayscale Ethereum Classic Trust (ETCG)997.8%810.0%
Grayscale Ethereum Trust (ETHE)343.7574.9
Breakwave Dry Bulk Shipping (BDRY)255.5223.0
VelocityShares 3x Long Natural Gas ETN (UGAZF)252.9-30.0
Direxion Daily Retail Bull 3X (RETL)150.6354.5
ProShares Ultra Bloomberg Natural Gas (BOIL)135.85.2
MicroSector US Big Banks 3X Lvrgd ETN (BNKU)122.9336.2
Direxion Daily MSCI Real Est Bull 3X (DRN)105.5134.7
iPath Global Carbon ETN (GRNTF)89.0108.8
iPath Series B Carbon ETN (GRN)85.3103.8
Grayscale Bitcoin Trust* (GBTC)62.8298.2
Sources: IBD, Morningstar Direct, S&P Global Market Intelligence through Aug. 31, * – shown for comparison
Follow Matt Krantz on Twitter @mattkrantz


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