What’s different about Valkyrie bitcoin-focused ETF?

Nasdaq Stock Market listed crypto asset manager Valkyrie’s exchange-traded fund (ETF) on Tuesday. Valkyrie Investments is a U.S-based financial services firm with a focus on digital assets. It’s new fund, ‘Valkyrie Bitcoin Miners ETF’, will invest in domestic and foreign companies that make their revenue mainly from bitcoin mining operations. The fund will, therefore, not offer direct exposure to bitcoin. But before we dive deeper…

What exactly are Bitcoin ETFs?

Similar to mutual funds, exchange-traded funds are a pool of investment funds that trade on a stock exchange. In the case of Bitcoin ETFs, these funds track or mirror the price of bitcoin and allow people to invest in the crypto without actually owning bitcoin themselves. In other words, people who invest in the fund own a significant amount of shares in a Bitcoin ETF.

How is Valkyrie’s ETF different? 

According to Valkyrie, the fund will invest at least 80% of its net assets in companies that derive a minimum of 50% of their profit from bitcoin mining. Keeping up with sustainable times, miners in the fund’s portfolio use about 77% renewable energy compared with average renewable energy usage throughout the U.S. of 31%.

Because of bitcoin’s decline in price at the start of 2022, other U.S.-listed ETFs with heavy exposure to crypto miners had a rough start to the year, but they have been improving as bitcoin regained its price. This includes Viridi Cleaner Energy Crypto-Mining & Semiconductor ETF (RIGZ), and the Bitwise Crypto Industry Innovators ETF (BITQ).

It is worth noting that, of late, the U.S. has become the top destination for bitcoin miners, overtaking China, which was once the market leader in hashrate (total computing power of miners). 

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Also Read:  What to expect in 2022, new bitcoin trends and more.