Summary I have a buy rating on the Bitwise Crypto Industry Innovators ETF due to signs of a bitcoin recovery and bullish seasonality. While the valuation is elevated, technical support is in play as bitcoin's price rallies of last week's low under $80,000. Despite its high volatility and poor ETF Grade, BITQ's concentrated portfolio and potential for new highs make it a compelling investment. Technical indicators suggest a bottom may be in place, with support near $14 and bullish seasonality expected to drive gains through mid-year. It has been a dramatic handful of days in the crypto markets. Bitcoin plunged from the mid-$90,000s to below $80,000 for a moment last Friday morning. It was a classic high-volatility correction in the world’s most valuable digital currency, but bitcoin snapped back sharply on February’s final day. Another upward jolt came about last Sunday when it was announced that President Trump called for the creation of a crypto strategic reserve. After being up 16% year-to-date on Trump’s first day in office and then plunging to a –16% YTD return last week, bitcoin is now flat in 2025 as of this writing. It’s been a roller coaster ride to say the least. Today, I’m analyzing a somewhat new ETF focused on crypto-related stocks. The Bitwise Crypto Industry Innovators ETF ( BITQ ) is a small fund, and it has been volatile just like the entire crypto market in recent months. I have a buy rating on the product as I see last Friday’s bitcoin price action as a washout, setting the stage for new highs in the world’s biggest cryptocurrency. Bitcoin: Retraces Half the January-February Plunge StockCharts.com Chances of a Bitcoin Reserve Rising Kalshi Trump Comes to Crypto's Rescue? Truth Social According to the issuer , BITQ provides focused exposure to the crypto economy without the complications of holding crypto assets directly. It’s a traditional, regulated ETF, giving holders simplicity and ease of use. Bitwise is one of the largest crypto asset managers. The index leverages Bitwise’s industry expertise to identify what they believe are the right companies in the space. BITQ is a small ETF with just $173.5 million in assets under management as of February 28, 2025. It carries a high annual expense ratio of 0.85% while the trailing 12-month dividend yield is low at just 1.0%. Share-price momentum has been weak since January 20, back when bitcoin notched its all-time high. BITQ shares actually peaked in advance of Trump being sworn into office. December 5, 2024, was its cycle high, just shy of $23. The fund fell 38% to its low last week near $14, successfully holding the pre-election nadir of $14.07. As you might suspect, BITQ is a highly volatile product , and that’s seen in its very poor F ETF Grade per Seeking Alpha’s quantitative scoring system. The annualized volatility is sky-high at 65%, so I underscore that using a small position size with this crypto equity fund is important when it comes to risk management. What’s more, liquidity metrics are sketchy since average daily volume is under 200,000 shares while the 30-day median bid/ask spread is high at 28 basis points, so using limit orders during the trading day, particularly around the market’s open, is prudent. Looking closer at the portfolio, BITQ has mixed exposure across the style box. A plurality of its holdings is found in the risk-on small-cap growth area, which underscores the ETF being a high-volatility product. The 36-holding allocation was created in 2021, and it sports a price-to-earnings ratio of 28.2x, per Morningstar, with a long-term EPS growth rate of 10%. The PEG ratio of nearly 3 is no bargain, but with bitcoin potentially back in bull-market mode, the valuation is not a primary concern today. BITQ: Portfolio & Factor Profiles Morningstar BITQ is primarily a fintech fund. Sixty-eight percent of the portfolio is invested in the Financials sector with another 29% allocated to Information Technology. I would also call out that there is international exposure—25% of BITQ is invested in non-US stocks. The concentrated portfolio shows a high 58% of assets allocated to the top 10 positions, so monitoring both fundamental and technical developments in names like Strategy (MicroStrategy) ( MSTR ), Coinbase ( COIN ), and MARA Holdings ( MARA ) is a sound strategy. BITQ: Sector and Dividend Information Seeking Alpha Also catching my eye is bullish bitcoin seasonality. While the cryptocurrency was down big in February—its worst month since June 2022—the March through July period has been strong when analyzing historical trends. More recently, since 2019, bitcoin has a mean March return of 9%, up 5 of 6 times with gains often extending through mid-year. Bitcoin: Bullish Seasonal Stretch Through July Barchart Strong Bitcoin Returns March-May Since 2019 StockCharts.com The Technical Take With high volatility in the crypto universe as we enter March, BITQ’s chart has interesting features if you’re a bitcoin bull. Notice in the graph below that the fund tagged its long-term 200-day moving average, briefly dipping below that mark, in late February. It has a history of pulling back to the 200dma before rallying sharply ever since the fund notched its all-time low of $3.20 in December 2022. Marking the top last year was a bearish RSI momentum divergence. Price hit a new high, but the RSI indicator at the top of the chart made a lower high, a telltale bearish clue. Now, after hitting technical oversold conditions last week, I see signs of capitulation washout. The weak momentum tally was paired with a volume spike, lending further evidence to a potential bottom being in place. I see support near $14 with the high $9s being another downside point of interest. On the upside, BITQ paused at its 61.8% Fibonacci retracement level from the November 2021 all-time high to the December 22 low. That is a longer-term resistance point, while the mid-$16s is near-term resistance. BITQ: Shares Fall To Trendline Support On Oversold Conditions StockCharts.com The Bottom Line I have a buy rating on BITQ. With signs of a bitcoin recovery, the sharp 37% fall in this crypto equity ETF may be done. With bullish seasonality on tap, I expect BITQ to catch a bid in the months ahead.
