WGMI holds a basket of Bitcoin mining-related stocks, offering an indirect exposure to Bitcoin and the entire crypto market.
Both the CoinShares Bitcoin Mining ETF (NASDAQ:WGMI) and iShares Ethereum Trust ETF (NASDAQ:ETHA) offer exposure to the crypto ecosystem, but they do so in fundamentally different ways: ETHA mirrors the price movement of Ethereum (CRYPTO:ETH) itself, while WGMI targets companies involved in Bitcoin mining and related infrastructure. This comparison breaks down the key differences to help investors understand which approach may appeal, depending on risk tolerance, cost sensitivity, and desired crypto exposure.
The 1-yr return represents total return over the trailing 12 months.
WGMI has a notably higher expense ratio than ETHA but has maintained positive yields, while ETHA’s price has declined over the last 12 months.
ETHA, by contrast, is a single-asset trust that tracks the price of Ether, with 100% exposure to the cryptocurrency and no underlying equities. Less than two years old, the ETF’s price has fallen 15.62% since its inception.
As with most cryptocurrencies, investors must be aware of the risks associated with crypto-related ETFs. ETHA especially carries a higher risk because it’s been on the market for less than 2 years and holds only Ethereum. So the fund’s price can be highly volatile and reliant on the coin’s success. Cryptocurrencies are generally more volatile than stocks.
And while WGMI’s holdings are actual stocks, many of its top holdings are tied to the crypto market, so it can carry a higher risk than many other ETFs.
It should also be noted that no beta measurement is provided for either ETF. The beta measures price volatility relative to the S&P 500, and is often calculated from five-year weekly returns. And since both funds are less than five years old, that type of measurement isn’t applicable at the moment.
When it comes to WGMI specifically, it has the edge over ETHA on price gains and dividend yield, as the Bitcoin mining ETF has a yield of 0.10%, while ETHA doesn’t pay a dividend. However, WGMI may gradually become less of a Bitcoin mining ETF, as many mining companies, including those in the ETF, are actively transitioning to or incorporating high-performance computing (HPC) and AI data center operations.
Common reasons for transitions include diversifying revenue streams and/or moving away from mining, which has become increasingly controversial due to concerns about environmental impact. So if investors don’t mind the transition that WGMI is undergoing, it’s still a great option for indirect exposure to crypto.
ETF (Exchange-traded fund): A fund that trades on stock exchanges, holding a basket of underlying assets.
Trust (single-asset trust): A fund structure that holds only one asset, such as a single cryptocurrency or commodity.
Expense ratio: Annual fund operating costs expressed as a percentage of the fund’s average assets.
AUM (Assets under management): The total market value of all assets managed by a fund or investment firm.
1-year return: The total percentage gain or loss an investment produced over the past 12 months.
Beta: A measure of how volatile an investment is compared with a benchmark index, usually the S&P 500.
Volatility: The degree to which an investment’s price moves up and down over time.
Max drawdown: The largest peak-to-trough percentage loss an investment experiences over a specific period.
Risk-adjusted return: An investment’s return after accounting for the amount of risk taken to achieve it.
Sector exposure: The percentage of a fund’s assets invested in particular industries, such as technology or financial services.
Dividend yield: Annual dividends per share divided by the share price, showing income return from an investment.
Underlying equities: Individual stocks held inside a fund, representing ownership in specific companies.
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Adé Hennis has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Ethereum. The Motley Fool has a disclosure policy.
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