Spot bitcoin ETFs exploded onto the scene this year. Since the start of the year, the price of bitcoin has risen from about $42,000 to more than $60,000 as spot strategies have grown. While rate cuts played a part in improving bitcoin’s bullishness, the cryptocurrency’s outlook for the rest of 2024 remains unclear. With the overall outlook positive, however, it may be worth taking a closer look at bitcoin miners via an ETF like the Valkyrie Bitcoin Miners ETF (WGMI ).
See more: The 2024 Election, Bitcoin & BRRR
WGMI stands out for a few key reasons. It presents an active ETF approach to bitcoin miners, empowering its managers to adapt as needed to a changing category. What’s more, that active remit can empower its managers to take a closer look at potential firms.
In the Year of Spot Bitcoin, Look to Bitcoin Miners
WGMI also applies a strict standard for identifying firms as bitcoin mining operations. The bitcoin miners ETF invests in firms that derive at least 50% of revenue from mining or related services. Charging a 75 basis point fee, the fund has raised more than $100 million in AUM.
Interestingly, the ETF is set to hit its three-year ETF milestone in just a few months, positioning it for potential momentum. The fund has returned 91.9% over the last year per ETF Database data. That has helped it outperform its ETF Database Category and FactSet Segment averages.
What, then, is the use case for WGMI and bitcoin miners moving forward? While traditional commodities investing allows some certainty of a consistent relationship between production and commodity production, a given hashrate does not guarantee future bitcoin quantity, per analysis from CoinShares Bitcoin Research Lead Christopher Bendiksen.
That has caused a serious downwards pressure on controllable metrics like electricity costs, but other revenue can be generated. Sale of waste heat and power trading, for example, offers potential revenue streams for miners. As the year of spot bitcoin draws to an end, it may be time to consider an ETF like WGMI.
For more news, information, and analysis, visit the Crypto Channel.
