Have you heard the news? Rates are likely dropping again this week, with the latest interest rate cut marking the end of an overall positive Fall for investors. The task before investors, then, is to find the short-to-medium term opportunities to benefit from cuts. Given how large tech looms over portfolios, the initial temptation to add more tech stocks certainly exists. Instead, however, this month’s interest rate cut may highlight the merit of investing in crypto mining via an ETF like the Coinshares Valkyrie Bitcoin Miners ETF (WGMI ).
See more: Payment Systems’ Increasing Use of Stablecoins Offers Crypto Opportunity
Crypto has already had a strong end to 2024 following the election of Donald Trump, who has campaigned on supporting crypto. For an interest rate cut, however, crypto, and crypto mining, specifically, can appeal as a thematic subcategory of tech. While cryptocurrencies can offer options for volatility or as a store of value, crypto tends to rise in tandem with tech.
December's Interest Rate Cut: A Crypto Catalyst?
Cryptocurrency storage and mining require significant infrastructure and tech like powerful chips. Those tech areas benefit from rate cuts on their own, but also from new enthusiasm for the currencies, themselves, via another interest rate cut. Together, those factors speak to the case for a specific crypto mining ETF like WGMI.
The ETF launched in February, 2022. Charging a 75 basis point (bps) fee, the active crypto mining ETF invests in firms deriving at least 50% of revenue from mining bitcoin. That includes developing key chips, hardware, and software.
The strategy’s active approach could help it deliver on its goals, as well. Where a passive fund would simply track crypto-related firms, WGMI can lean on its managers’ experience to adapt. For example, should an interest rate cut see a big spike for certain segments of the crypto universe, the active crypto mining ETF could lean in. Taken together, WGMI can offer a way to not only approach crypto, but also get a specific slice of the overall tech investing pie.
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