Why is the BetaShares Crypto Innovators ETF (ASX: CRYP) share price leaping higher today?

This crypto ETF is having a day in the green.

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The S&P/ASX 200 Index (ASX: XJO) is having a pretty flat day so far this Wednesday. At the time of writing, the ASX 200 is down by 0.27% at 7,336 points. But one ASX exchange-traded fund (ETF) is bucking that pessimism. That’s the BetaShares Crypto Innovators ETF (ASX: CRYP).

CRYP units are instead enjoying a very healthy day on the ASX boards today. This ETF is currently up by 1.8% at $7.92 per unit. So how is this cryptocurrency-based ETF outperforming the broader market today? Well, to answer that, let’s check out what this ETF actually invests in.

What’s behind the CRYP ETF’s strong performance today?

CRYP is one of the newer ETFs on the ASX boards. It only listed in early November but unfortunately for investors, it hasn’t been an easy ASX debut. The ETF is now down close to 30% from the pricing it was commanding on its first few days of trading. This ETF doesn’t invest in cryptocurrencies like Bitcoin (CRYPTO: BTC) directly. Rather, it holds companies that BetaShares estimate provide “exposure to global companies at the forefront of the dynamic crypto economy”.

Its current top holdings include Coinbase Global Inc (NASDAQ: COIN) with a 10.5% ETF weighting, MicroStrategy Incorporated (NASDAQ: MSTR) with a 10.2% weighting, and Silvergate Capital Corp (NYSE: SI) with a 9.3% weighting. Other significant shares include Marathon Digital Holdings Inc (NASDAQ: MARA), Riot Blockchain Inc (NASDAQ: RIOT), and Voyager Digital Ltd (TSE: VOYG).

So following a sharp rise in cryptocurrency prices over the past 24 hours or so, many of these companies had very strong days of trading on the US markets last night (our time). For example, Coinbase shares were up 4.05%. MicroStrategy rose 3.86%, while Silvergate shares were up 8.65%. Marathon, Riot and Voyager all rose by more than 5%.

So this is likely the primary diver of the CRYP ETF’s gains so far this Wednesday. When an ETF’s heaviest underlying holdings all have such a strong session, it increases the value of the entire ETF’s portfolio and, by extension, its unit price. That’s likely what we have seen play out so far today.

The BetaShares Crypto Innovators ETF charges a management fee of 0.67% per annum.

Motley Fool contributor Sebastian Bowen owns Bitcoin and Coinbase Global, Inc. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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