Valkyrie offers another way to invest in crypto with a new ETF

Posted: 9 February 2022 4:32 pm
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This ETF invests in public companies that mine cryptocurrencies.

Another crypto mining exchange-traded fund (ETF) launched this week: the Valkyrie Bitcoin Miners ETF (WGMI).

If you don’t want to directly invest in crypto, investing in this or other mining ETFs could give you exposure to cryptocurrency price moves.

What is Valkyrie Bitcoin Miners ETF?

An ETF is a pool of securities that track either an index or an asset, similar to mutual funds. Similar to stocks, ETFs can be traded on an exchange during market hours like any company stock, while mutual funds price and trade only once daily. This makes ETFs useful for investors who don’t want to pick individual stocks themselves.

Instead, they buy shares of the ETF, get exposure to the assets the ETF invests in, and have the same trading flexibility you get with stocks.

This Valkyire ETF is focused on companies that mine cryptocurrencies. Largest holdings of this ETF with allocations between 8% and 10% include Argo Blockchain (ARBK), Cleanspark (CLSK), Stronghold Digital Mining (SDIG), and Canadian stocks Bitfarms (BITF) and Hive Blockchain (HIVE) .

The ETF also holds Nvidia (NVDA) and Advanced Micro Devices (AMD), both of which manufacture graphic cards used for crypto mining.

Crypto mining with renewable energy

Mining cryptocurrencies requires a lot of energy. For example, one Ethereum transaction costs more kilowatt-hours than 100,000 Visa transactions. Granted, this will change once Ethereum moves from mining to proof-of-stake, but it’s still taxing on the environment.

If that’s something that worries you, the Valkyrie ETF owns companies that use renewable energy sources. The company claims that the weighted average on all of its holdings use 77% of renewable energy, which is more than the 31% of all miners that use renewable energy in the US.

Not the first crypto mining ETF

Valkyrie joins two more crypto mining ETFs:

  • Viridi Cleaner Energy Crypto-Mining & Semiconductor ETF (RIGZ)
  • Bitwise Crypto Industry Innovators ETF (BITQ)

Both of these entered the market in 2021, and both are down overall, similar to Bitcoin’s price. If you’re bullish on the crypto market, getting into beaten-down crypto miner stocks can be a timely choice.

Learn more with our guides on cryptocurrency ETFs and Bitcoin ETFs.

At the time of publication, Kliment Dukovski did not own any of the stocks or ETFs mentioned in this article.

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