In the equities landscape, few stocks are as tethered to bitcoin’s price action as are cryptocurrency miners. Just look at the CoinShares Valkyrie Bitcoin Miners ETF (WGMIC). For the month ending July 15, that ETF returned nearly 23%.
That’s an impressive rally off the April lows. Add to that, WGMI could have more upside ahead of it because, even with its recent bullishness, the ETF resided 21.51% below its 52-week high as of July 15. In other words, more price appreciation by the largest cryptocurrency could very well boost WGMI’s fortunes.
Advisors and experienced investors know that crypto mining equities, including WGMI components, are unlikely to fully to decouple from bitcoin, but there are steps those companies can take to reduce dependence on mining. Some are already make such moves, with artificial intelligence (AI) being a centerpiece of those efforts.
AI Prime Diversification Avenue for WGMI Holdings
The extent to which bitcoin miners have ventured into AI varies on a company-to-company basis. However, it is a practical, often seamless transition, because crypto miners have the computing competencies and power needed for AI success. Core Scientific (CORZ), WGMI’s third-largest holding, is a strong example of a crypto miner that made a successful AI bet.
“The company filed for Chapter 11 bankruptcy in late 2022. It emerged in early 2024 to relist on the Nasdaq, then shifted from a pure Bitcoin miner to a colocation service provider by leasing out data centers to AI firms. It signed a 12-year, $3.5-billion deal with CoreWeave in June 2024 to host CoreWeave’s high-performance computing (HPC) operations,” reported Yohan Yun for Coin Telegraph.
Earlier this month, CoreWeave (CRWV) announced a $9 billion all-stock takeover of Core Scientific — a clear sign the target made impressive AI strides. HUT 8 Corp. (HUT) is another example of a WGMI holding that made AI a priority and is reaping rewards from that move. It’s been nearly a year since Hut 8 unveiled its GPU-as-a-service offering.
“The pivot saw Hut 8 deploy over 1,000 Nvidia H100 GPUs — specialized chips widely used for training and running AI models — to drive its cloud-based AI compute services. The launch came with a five-year fixed-payment and revenue-share deal as revenues for Bitcoin miners tightened following the April 2024 halving event,” noted Coin Telegraph.
Speaking of Nvidia (NVDA), the semiconductor maker is a CoreWeave investor and a member of the WGMI lineup.
