Many of the best performing thematic ETFs this year are related to cryptocurrencies and the blockchain as bitcoin rebounds, but investors have so far declined to embrace the rally. Many funds that primarily hold crypto-related stocks have already doubled in price this year. The Global X Blockchain ETF (BKCH) and the Bitwise Crypto Industry Innovators ETF (BITQ) , for example, are both up nearly 200% year to date. BKCH YTD mountain This Global X blockchain ETF has nearly tripled in price in 2023. The rally has come as bitcoin has rebounded to around the $30,000 level after the starting the year below $17,000. Dan Weiskopf, a portfolio manager at Tidal Financial Group who runs the Amplify Transformational Data Sharing ETF (BLOK) , said that the bitcoin miner stocks like Riot Platforms have driven the strong performance. “Their input costs have leveled off, and their output — which is bitcoin — has gone up 100%. So it’s basically the best of both worlds,” Weiskopf said. The actively managed BLOK appears to be the largest ETF in this category, according to FactSet, with about $600 million in assets. It has a total return of about 70% year to date. But the fund has actually seen net negative flows of $13.3 million this year despite outperforming the broader market. Other funds in the theme have also failed to attract significant new capital despite the group’s dramatic rally. This could partly be explained by a general risk-off approach for investors this year. Overall flows into equity funds have been muted in 2023, while cash has poured into money market funds. But some other risk-on thematic funds, like the Global X Robotics & Artificial Intelligence ETF (BOTZ) , have seen seen their recent success pull in new cash from investors. The $2.62 billion fund has attracted $725.1 million in 2023. Weiskopf said that the murky regulator situation around crypto, such as the Securities and Exchange Commission’s lawsuit against Coinbase , has spooked away some investors and financial advisers. “I think the hesitation is due to a large degree to the concerns around regulation in the space,” Weiskopf said. ETF investors looking for crypto exposure could also be waiting for a more pure-play product. Confidence is growing in the crypto industry that the Securities and Exchange Commission finally may allow a spot bitcoin ETF after asset management giant BlackRock filed in June to launch a fund. However, Weiskopf said that he thinks there is room for direct crypto exposure and blockchain funds. “The return streams may be correlated, but on a long-term basis we’re going to end up being more about blockchain than just the bitcoin exposure,” Weiskopf said.