June 9, 2023

With earnings of up to 40% Bitcoin mining ETF leads the market

The new year started higher with Bitcoin and other altcoins, with most cryptocurrencies rising to multi-month highs. The equity ETF market is also dominated by BTC products, with the Valkyrie Bitcoin Miners ETF (WGMI) being the leading equity product on the market and up 40% year-to-date.

Analyst point out that the Bitcoin mining Valkyrie ETF is very “focused”, with investments in only 20 companies, including Argo Blockchain, Bitfarm and Intel, among other notable names. The Bitcoin Mining ETF is leading the market for traditional equity ETFs and leveraged equity ETFs, which is considered a rare occurrence.

In February 2022, the WGMI ETF debuted on the Nasdaq, but it did not directly invest in BTC. 80% of its net assets offer exposure through securities of companies that derive at least 50% of their income or profit from mining BTC. Valkyrie invests the remaining 20% in companies that have “a significant portion of their net assets” in Bitcoin.

The ProShares Bitcoin Strategy ETF was the first US-approved Bitcoin ETF, launched in October 2021, that tracked Bitcoin prices through futures contracts traded on the CME. The first ETF gained a lot of early market traction, seeing $1 billion in trading volume on its first day. This led many to believe that success would ultimately convince regulators to approve the first spot-market-based ETF in 2022. However, a prolonged bear market and an epidemic of bankruptcies turned the tables on cryptocurrency ETFs.

Cryptocurrency-related ETFs became the two worst performing ETFs in Australia in 2022, and the same was true in the United States.

ETFs were seen as the next big thing for the cryptocurrency industry to drive mass adoption. However, this was hampered by the prolonged bear market and several negative developments in 2022.

Published by Cryptobtcbrowser, a news and information agency.

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