The Bitcoin Mining ETF That Returned 52% in One Week, And Most Income Investors Have Never Heard of It

By John Seetoo Published Jun 26, 12:47PM EDT

Quick Read

WGMI surged 52% in a single week and 243% over one year while pure-play Bitcoin ETFs IBIT and FBTC each lost over 43%.
Bitcoin miners repurpose their hardware for AI and other tech sectors, generating diversified revenue streams that hold strong even when Bitcoin prices fall.
Fixed mining infrastructure costs amplify profits exponentially when BTC prices rise, since revenues scale across multiple coins while overhead stays flat.
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The Bitcoin Mining ETF That Returned 52% in One Week, And Most Income Investors Have Never Heard of It — © Chris Devillio / Shutterstock.com

It’s no secret in the cryptocurrency world that Bitcoin has plummeted from a high of roughly $122,000 to $59,000 of late. However, the digital infrastructure costs of Bitcoin mining are transferable to other technology sectors – such as A.I.

At the time of this writing, CoinShares Valkyrie Bitcoin Miners ETF (NASDAQ: WGMI) is up +74.4% year-to-date and +243.77% year-over-year. It even recently returned +52% in a single week. WGMI exemplifies this unusual discrepancy between the trends of Bitcoin miners vs. Bitcoin itself.

The Miners’ Advantage

A translucent, light blue robot stands on the right side of a dark blue, digitally networked background. A large, glowing blue Bitcoin symbol, designed like a circuit board, is prominent in the center-left. Various blue hexagonal icons representing concepts like a gear, money stack, dollar sign, chart, laptop, and exchange arrows are interconnected by glowing lines across the dark background. The scene suggests advanced technology and digital finance.

Bitcoin miners are making bank by utilizing their cryptocurrency infrasturcture for A.I. at top prices.

As a digitally created asset, Bitcoin and blockchain cannot exist without digital technology and the hardware required to generate it. The role of BTC miners is a crucial one. Without their server power, facilities, and equipment, the Bitcoin blockchain could not be maintained. As these hardware costs are fixed, when BTC prices rise, the miners’ revenues also rise — commensurately higher, after deducting those expenses. This is due to multiple Bitcoins that a miner may be responsible for, which exponentially increases revenues for that miner.

For example, if the price of BTC goes up +10%, a miner whose resources are being deployed for 20 Bitcoins in the blockchain, will see those 20 Bitcoin revenues minus the base cost for overhead. If that cost amounts to a pro-rated 10% across 20 then profits might be something like this: 20 BTC/10% costs=2%; 10%-2%=8%; 20×8%= 160%.

Application Specific Integrated Circuits (ASIC) that only process cryptocurrencies have a high depreciation due to built in obsolescence in the wake of new designs. This depreciation accelerates when Bitcoin and other crypto prices fall precipitously.

However, the same power sources, server power and computer equipment can be deployed for gaming, research, animation, or even more lucrative areas in demand, such as Artificial Intelligence. A number of entrepreneurial miners decided that being limited to one-trick pony Bitcoin miner status was overlooking the range of opportunities available with those same digital mining resources. As a result, companies in the Bitcoin mining sector who have branched out their equipment for other application use are seeing the additional revenue streams go directly to their bottom lines. Even as Bitcoin prices have faltered, these miners have managed to continue boasting strong revenue and profit streams, thanks to diversification of that same mining equipment.

CoinShares Valkyrie Bitcoin Miners ETF

A person's finger points towards a central digital graphic depicting a miner with a pickaxe next to a pile of Bitcoin, surrounded by brown cubes. This central element is connected by white lines to multiple glowing circular icons, each containing a yellow Bitcoin symbol on a dark background, all set against a blurred dark blue backdrop.

WGMI selects stocks based on havong at least 50% of revenues derived from BTC mining or mining support hardware or software.

Launched on February 7, 2022, WGMI is an actively managed ETF that invests in companies deriving at least half of their revenues from Bitcoin mining or providing hardware/software for mining purposes. Unsurprisingly, WGMI’s triple digit 1-year returns come mostly from those mining companies who read the handwriting on the wall early on and diversified their operations to include A.I.

Net Assets	$448 million	YTD Return	74.44%
Yield	0.00%	1-Year Return	243.77%
NAV	$66.83	3-Year Return	72.93%
52-Week Range	$21.23-$76.94	Expense Ratio	0.75%
Avg. Daily Volume	611,811 shares	P/E Ratio	24.85
Holdings	26 stocks	Beta	4.66

Top 1o Holdings:

Cipher Digital: 15.43%
IREN Limited: 13.48%
TeraWulf, Inc.: 9.02%
Core Scientific: 7.14%
Keel Infrastructure: 6.98%
Hut 8 Corp: 6.44%
HIVE Digital Technologies: 5.79%
Riot Platforms: 5.24%
CleanSpark Inc.: 5.18%
BitDeer Technologies Group: 4.73%

Bitcoin Mining vs. BTC

As Bitcoin prices have plummeted nearly -50%, WGMI’s Bitcoin mining stocks have sent the ETF up over +74% YTD.

Comparisons between WGMI and pure-play BTC ETFs, such as iShares Bitcoin Trust ETF (NASDAQ: IBIT) or Fidelity Wise Origin Bitcoin Fund (CBOE: FBTC) starkly illustrate the miners’ advantage via diversification and multiple BTC leverage:

	WGMI	IBIT	FBTC
YTD Return	+74.44%	-31.78%	-31.72%
1-Year Return	+243.77%	-43.61%	-43.57%
3-Year Return	+72.93%	n/a	n/a

Bitcoin mining companies’ continued bullish trend is certainly something worth considering for investors seeking growth. Although WGMI pays no dividend income, it can be helpful for income investors seeking upside to offset inflation and depleting NAV that may be occurring in their high-dividend holdings that might be returning capital.

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About the Author John Seetoo →

After 15 years on Wall Street with 7 of them as Director of Corporate and Municipal Bond Trading for a NYSE member firm, I started my own project and corporate finance consultancy. Much of the work involves writing business plans, presentations, white papers and marketing materials for companies seeking budgetary allocations for spinoffs and new initiatives or for raising capital for expansion or startup companies and entrepreneurs. On financial topics, I have been published under my own byline at The Motley Fool, 247wallst.com, DealFlow Events’ Healthcare Services Investment Newsletter and The Microcap Newsletter, among others. Additionally, I have done freelance ghostwriting writing and editing for several financial websites, such as Seeking Alpha and Shmoop Financial. I have also written and been published on a variety of other topics from music, audiophile sound and film to musical instrument history, martial arts, and current events. Publications include Copper Magazine, Fidelity (Germany), Blasting News, Inside Kung-Fu, and other periodicals.