Crypto Hit by Murphy's Law This Year

Bitcoin ETFs, 2022’s worst-performing funds, savaged by cascading failures.

Senior ETF Analyst
Reviewed by: Sumit Roy
Edited by: Sumit Roy

Those who say crypto follows no rules are forgetting one: that unfortunate law of Mr. Murphy’s. 

The rule that says everything that can go wrong will go wrong has lorded over this speculative corner of the marketplace this year. 

From hacks to scams to bursting bubbles, the year has been a disaster for crypto investors. Investors who got their exposure to crypto through exchange-traded funds haven’t escaped the long arm of Murphy’s law. 

For example, the $380 million Amplify Transformational Data Sharing ETF (BLOK), the largest crypto industry-focused ETF in the U.S., dropped 62% this year, one of the year’s worst performances. 

BLOK has only been outdone on the downside by other blockchain ETFs, like the Viridi Bitcoin Miners ETF (RIGZ), the VanEck Digital Transformation ETF (DAPP), the Global X Blockchain ETF (BKCH) and the Bitwise Crypto Industry Innovators ETF (BITQ)—each losing more than 80% this year. 

Exposure Via Stocks  

These ETFs hold stocks of companies involved in the crypto industry, permitting crypto exposure without directly buying virtual currencies. They were often sold as a safer alternative to buying blockchain-based assets themselves. 

Clearly this wasn’t the case.  

From MicroStrategy. a software company turned quasi-bitcoin fund, to Coinbase, a cash-burning crypto exchange, these stocks ended up being just as risky as crypto assets. 

Things could have been worse. Investors avoided the implosion of crypto exchange FTX, only because the company was private (though that’s a reason it was able commit such brazen acts in the first place).

Also, some blockchain ETFs hold stocks of mature companies that are only dabbling in the crypto industry. BLOK’s four largest holdings—IBM, Accenture, GMO Internet and SBI—certainly wouldn’t be considered crypto companies by most people. 

But without those positions, the fund would have performed even worse. The aforementioned BKCH, which holds a much purer basket of blockchain-focused companies, has suffered for its focus on the industry—but it’s arguably the better product for investors who want exposure to the space. 

Limited Options  

For ETF investors opting for more direct exposure to crypto assets, their options were limited—which was either a good thing or a bad thing, depending on how you think about it. 

On the one hand, following 2021’s approval of the first bitcoin futures ETFs, investors were able to finally invest in cryptocurrency through a traditional ETF, something they’ve wanted to do for a long time. 

Unfortunately, that ETF launched at the exact worst moment, when bitcoin prices were peaking above $60,000. Since then, it’s been a ride straight down for the ProShares Bitcoin Strategy ETF (BITO), which has lost more than 62% this year.  

On the plus side, that decline is almost exactly in line with the drop in underlying bitcoin prices, so even without the elusive spot bitcoin ETF that investors have been clamoring for, investors have had a futures-based alternative that’s performed just as well as a spot bitcoin ETF conceivably would have. 

But outside of BITO and a handful of other ETFs tied to bitcoin futures, there hasn’t been any other way to get exposure to the crypto assets through U.S.-listed ETFs, and that might have saved investors from getting crushed in assets that have performed much worse than even bitcoin (e.g., Luna, FTT and Shiba Inu, to name a few).  

Looking Ahead  

As we sit here today, the prospects of any novel crypto ETFs coming to market seems slim. The crypto industry looks set to go through the regulatory wringer, and until there is more clarity on that front, the SEC is unlikely to allow anything other than bitcoin futures ETFs and blockchain equity ETFs to trade in the U.S. 

For investors seeking more variety, the rough and tumble world of crypto exchanges is still available (caveat emptor), or for those willing to put in the work, self-custody is also an option (though you’d still have to go through an exchange to buy the assets initially).  

Then there is also the notorious Grayscale suite of over-the-counter crypto trusts, including the Grayscale Bitcoin Trust (GBTC), the Grayscale Ethereum Trust (ETHE) and others. 

Both GBTC and ETHE are trading at nearly 50% discounts to their net asset values as the odds of an ETF conversion grow dim. Worries about the health of Grayscale’s parent company, Digital Currency Group, have also raised concerns about what that could mean for the trusts. 

For the average investor, what were pretty straightforward products are becoming anything but, so unless you have a strong view on DCG and Grayscale, or the chances of liquidation or ETF conversion, you might want to steer away from these products. 

Bumpy Road  

Meanwhile, the crypto industry itself will continue to work through the issues that brought it down in 2022. The bursting of the price bubble is one thing—that’s easy to brush aside and move on from—but the outright frauds are another.  

Confidence in crypto has been severely shaken and the naysayers are back to writing obituaries for the industry.  

Still, history offers some hope for the future. Crypto has gone through many winters and come roaring back each time. Could this time be different? Certainly. This is a high-risk industry full of high-risk assets.  

But the promise of decentralized technologies remains compelling, and as long as that’s the case, crypto will likely stick around.  


Email Sumit Roy at [email protected] or follow him on Twitter @sumitroy2     

Sumit Roy is the senior ETF analyst for, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for, with a particular focus on stock and bond exchange-traded funds.

He is the host of’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays,’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.