Publicly traded cryptocurrency miners often lead the way when it comes to stocks with the crypto-correlated label. That can be helpful when bitcoin and friends are trending higher.
Take a look at the CoinShares Valkyrie Bitcoin Miners ETF (WGMI ). Buoyed in part by bitcoin’s 2024 ascent, that exchange traded fund gained more than 23% last year. CoinShares actively manages WGMI, indicating it can be even more responsive to cryptocurrency upside than passively managed peers.
“WGMI provides targeted exposure to the companies at the forefront of transaction verification, ensuring transparency and security on the blockchain,” according to CoinShares.
As structured, WGMI could be a compelling idea for tactical, crypto-enthused participants. Still, there’s a growing, non-crypto thesis that could pave to long-term upside for some WGMI member firms while providing a buffer against digital currency price fluctuations.
WGMI Holdings Diversifying Business Models
While they have clear links to crypto, at their cores, miners are technology companies. Some have competencies that are transferrable to other tech segments. Those include high-growth fields such as artificial intelligence (AI) and hyper-computing.
“The crypto-currency mining sector is undergoing a major transformation, with Bitcoin miners increasingly diversifying into the artificial intelligence (AI) and high-performance computing (HPC) sectors,” reported David Wagner for Investing.com.
We are in an atmosphere of soaring energy prices, increased regulatory scrutiny and investor demands to diversify revenue streams. Some crypto miners are leveraging existing infrastructure and skills to move into disruptive tech areas with catalyst-rich long-term growth stories.
“Many mining companies are reallocating their existing infrastructure to AI. This pivot enables them to leverage their high-performance hardware for tasks such as data analysis, natural language processing, and image recognition,” according to Investing.com.
Several WGMI holdings, including Bit Digital and Hive Blockchain, have already made inroads into AI. Those firms could benefit as adoption of this new technology increases – something that’s expected to happen this year. Should that happen in earnest, the complexion of the crypto mining industry could change for the better.
“Some crypto mining companies are indeed set to become vital links in the AI industry, which could significantly enhance their long-term prospects,” noted Investing.com.
WGMI turns three years old next month The $196.5 million ETF devotes at least 80% of its roster to shares of companies that generate a minimum of 50% of their revenue from bitcoin mining.
For more news, information, and analysis, visit the Crypto Channel.
