CoinShares broadens WGMI as miners chase AI demand

CoinShares has expanded the scope of its WGMI exchange-traded fund beyond just bitcoin mining, as cryptocurrency miners increasingly pivot their energy-intensive businesses towards artificial intelligence. The Nasdaq-listed fund, renamed the CoinShares Bitcoin Mining and Digital Power ETF on August 18, now encompasses sectors such as AI data centers, power infrastructure, and high-performance computing. This significant expansion was introduced on August 18, while retaining the WGMI ticker.

The revised fund will now invest at least 80% of its net assets in companies involved in bitcoin mining and digital power businesses as defined by CoinShares. Eligible investments now include hyperscale data-center operators, semiconductor companies catering to AI workloads, electricity generators, energy infrastructure providers, and businesses developing high-performance or quantum computing technology.

However, the fund does not invest directly in bitcoin, cryptocurrency derivatives, or products that hold bitcoin. Its expense ratio remains unchanged at 0.75%.

The updated portfolio demonstrates the extent of this transformation. As of August 19, WGMI held 29 securities with assets under management of approximately $225.6 million. Cipher Digital led the fund with a significant $26.8 million stake, followed by Nebius Group at about $18.4 million. Other major holdings included WhiteFiber, IREN, Hut 8, Keel Infrastructure, Riot Platforms, CoreWeave, Hive Digital Technologies, and TeraWulf.

This shift is driven by several factors. Bitcoin miners' existing assets, such as large land plots, substations, grid connections, and power contracts, are valuable for AI infrastructure development. The economics of bitcoin mining, particularly after the April 2024 halving that reduced the block subsidy, have intensified the need for diversification.

Companies like Cipher Digital, which has secured long-term agreements for AI and high-performance computing projects, and Hut 8, with its substantial contracted IT capacity, exemplify this trend. Hut 8, in particular, has transitioned from a bitcoin-focused miner to an energy infrastructure and computing capacity provider by securing 949 megawatts of IT capacity and 1,330 megawatts of utility capacity by August.