The rise of the BetaShares Crypto Innovators ETF (ASX: CRYP) over the past few months has been nothing short of extraordinary.
Almost a year ago, this exchange-traded fund (ETF) was going for just $1.80 per unit. But today, those same units are being priced at $4.87 at the time of writing. Not only is that a 1.25% gain for the trading day thus far, but it also puts CRYP units up by approximately 170% since that last 52-week low of $1.80.
This cryptocurrency-focused ETF has also gained 37.2% over the past month alone. That's an extraordinary return for any investment over just a few weeks.
Looking at gains like this, it's hard not to feel just a little envious.
But should investors hold back from this ETF today, given the massive increase that's already taken place in this space? After all, it's not too often that we see such a strident march up in value for an ASX ETF.
Or does the BetaShares Crypto Innovators ETF remain a buy today?
Well, to answer those questions, let's look at why this ETF has shot the moon in recent months.
What's behind the Crypto Innovators ETF's extraordinary performance?
The Betashares Crypto Innovators ETF doesn't invest in cryptocurrencies like Bitcoin (CRYPTO: BTC) or Ethereum (CRYPTO: ETH) itself. So don't think you are gaining exposure to these digital tokens directly by buying this ASX ETF.
However, CRYP does give ASX investors access to a portfolio of companies that are all involved with the production and use of cryptocurrencies.
Some of its top holdings include Coinbase Global Inc (NASDAQ: COIN), MicroStrategy Inc (NASDAQ: MSTR) and Marathon Digital Holdings Inc (NASDAQ: MARA).
Cryptocurrency enthusiasts, and most ASX investors for that matter, would be aware that digital tokens like Bitcoin and Ethereum have been surging in value in recent months.
Bitcoin itself is up almost 50% over the past month alone and has recently exceeded its 2021 all-time highs. One Bitcoin is now worth more than $100,000 in our local currency, and more than US$66,000.
So although CRYP's ASX units don't benefit directly from these price rises, it does benefit indirectly as investors push up the value of stocks like cryptocurrency exchange platform Coinbase, and crypto miner Marathon Digital Holdings.
Coinbase stock is up almost 200% over the past six months alone, while Marathon has gained more than 83%.
So with its top holdings rocketing in value like this, it's no surprise to see the Betashares Crypto Innovators ETF soar to new heights.
Is there still time to buy CRYP units on the ASX?
Well, that's the $100,000 question. If you believe cryptocurrencies like Bitcoin have further to climb, then perhaps you'd be justified with an investment in this ASX ETF right now.
For all I, or anyone else knows, Bitcoin could continue to surge, which would, in all likelihood, make today to be a great time to buy the Crypto Innovators ETF.
However, I am personally staying on the sidelines. Looking at Bitcoin and other cryptocurrencies' history, it's pretty obvious that this space is highly volatile. We've seen massive price upswings before, but these have usually been followed by an equally massive sell off.
I'm not prepared to bet that this time will be any different. The best time to buy a cyclical ETF like CRYP is when other investors don't want a bar of it (12 months ago for example). Not when everyone is throwing money at it.
I could be wrong here. But it's a call I'm happy to make.
