The Newest Bitcoin Mining ETF on the Market

Recently launched Bitcoin ( BTC -0.30% ) mining exchange-traded fund (ETF) Valkyrie Bitcoin Miners ETF ( WGMI 0.12% )is hoping to grab investor interest with its focus on renewable energy and the miners that use it. In this episode of “The Crypto Show” on Motley Fool Live, recorded on Feb. 9, Fool.com contributors Jon Quast, Chris MacDonald, and Travis Hoium discuss the new ETF’s holdings and its fun, crypto-friendly ticker symbol.

Jon Quast: Moving along here, I did want to talk about this new ETF that launched on Monday, the Valkyrie Bitcoin Miners ETF. I’m not aware of any other Bitcoin mining ETF, maybe they do exist and I just wasn’t aware. But I love this ticker symbol here, guys. WGMI is the ticker symbol that they went with. For those who don’t know, this is often used in cryptocurrency circles, more NFT circles, I would say.

Travis Hoium: Yeah, definitely. [laughs]

Quast: WAGMI, W-A-G-M-I, and it stands for “we’re all going to make it,” right?

Hoium: That’s absolutely right, yeah.

Quast: Yeah, we’re all going to make it. That’s a symbol that they went with. They get a point there for great ticker symbol. Top four holdings in their ETF as of today, Bitfarms, Argo Blockchain, CleanSpark, and HIVE Blockchain Technologies. Really interesting that they went with some of the smaller Bitcoin miners here for big positions in their portfolio or in their ETF.

Chris MacDonald: I was diving into this a little bit there, Jon, about what their holdings are and why they picked their holdings. Looking at their fund page, it looks like their focus is on renewable energy and miners that focus on renewable energy. Their big selling point here is that the WGMI portfolio utilizes 77 percent renewable energy. I thought that was really interesting piece, especially for investors that are maybe a little bit turned off by the environmental piece of this. I know that, also in addition to miners, they do hold a number of chip manufacturers that provide specialized chips to miners and some software companies as well that are in the software space. It’s a pretty diversified ETF and it’s definitely an interesting option of being so new, it’s hard to gauge performance. But right now, given where Bitcoin miners are, some investors might see it right now as a good buying opportunity. It’s an interesting time to launch.

Quast: The reason I wanted to bring this to the table specifically, come on, there we go. This was interesting to me as I was looking at some data from Glassnode. This is reported by CoinDesk. But by and large, Bitcoin miners, [laughs] well, so as mining started out, it used to be a grassroots movement. It was people doing it in their home, in their garage, and over time, it’s consolidated over to these larger players like your Riot Blockchain, like your Marathon Digital, that just have thousands and thousands of miners. But by and large, these new consolidated miners, they are keeping the majority of the Bitcoin that they mine. They are raising funds through venture capital, through the stock market, things like that, so they don’t have to sell Bitcoin. This was interesting. Just over the weekend, it was the first time since November that there was a net outflow from Bitcoin miners. Roughly, 900 new Bitcoins are mined every single day. That’s how the supply is increasing over time. So yeah, selling more than what the new supply was. But by and large, if you look over the chart of the last three months, the last six months, they are holding almost everything. It’s just interesting when you think about that in terms of perspective of what is going to drive supply and demand here. Supply, I know I’ve said it several times on the show, but it’s just one of those dynamics that we don’t see the circulating supply increasing all that often when it comes to Bitcoin.