The Bottom 3 Worst Performing ETFs of 2022

Global X Blockchain ETF (BKCH)

2022 was not kind to the cryptocurrency and blockchain industry. Negative catalysts emerged one after another to hammer the industry, with notable incidents including the TerraUSD/Luna de-pegging and Celsius, Voyager, FTX, and BlockFi filing for bankruptcy.

The crypto bull markets of 2020 and 2021 saw numerous blockchain and crypto-related ETFs arrive on the market. And while the prospect of a true spot Bitcoin ETF continues to elude industry participants, other products such as Bitcoin futures and blockchain company equity ETFs popped up.

An example here is BKCH, which tracks the Solactive Blockchain Index. BKCH holds shares of companies involved in everything from crypto mining, blockchain transactions, & digital asset integration, which were hit particularly hard by the "crypto winter".

YTD returns as of December 29th, 2022: -85.64%

VanEck Digital Transformation ETF (DAPP)

Thematic ETFs like DAPP continued to be hit particularly hard as investors fled into more "boring but safe" sector such as energy and materials. When interest rates rise, interest in more speculative, high-beta investment dwindles in favor of a capital preservation approach.

Like BKCH, DAPP was also hard hit by the crypto meltdown. DAPP tracks the MVIS Global Digital Assets Equity Index, which holds 20 stocks participating in the digital assets, crypto, and Web 3.0 themes. Holdings in DAPP must have the potential of getting at least 50% of revenue from digital assets.

Currently, DAPP's top holdings include Block Inc. (SQ), Coinbase Global (COIN), and Riot Blockchain (RIOT), which are all down significantly from their all-time highs. With such a concentrated, high-beta portfolio, it’s no wonder that DAPP was particularly hard-hit in 2022.

YTD returns as of December 29th, 2022: -85.97%

Viridi Bitcoin Miners ETF (RIGZ)

When Bitcoin soared to an all-time high of $68,789 in November 2021, Bitcoin miners were making cash hand over fist as the value of their operations soared. Today, many of these miners are facing steep losses as the price of Bitcoin drops precariously close to their electricity costs.

Also hard-hit were the shares of semiconductor and chip manufacturers, many of whom benefitted from the surge in graphic processing unit (GPU) demand from miners during the crypto bull market. Today, this demand has dropped precariously, with used GPUs from miners now flooding the market.

It's no surprise that RIGZ, which holds shares of companies engaged in Bitcoin mining suffered greatly. The fund debuted at an unfortunate time, right as the cryptocurrency market was beginning its second short-lived bull run. At its peak, RIGZ was trading at around $53 per share in November 2021.

YTD returns as of December 29th, 2022: -87.11%