CoinShares broadens WGMI as miners chase AI demand

CoinShares has expanded the mandate of its WGMI exchange-traded fund beyond bitcoin mining, giving investors exposure to artificial intelligence data centres, power infrastructure and high-performance computing as miners increasingly reposition their energy-heavy businesses around AI.

The Nasdaq-listed fund was renamed the CoinShares Bitcoin Mining and Digital Power ETF on August 18, replacing its former CoinShares Bitcoin Mining ETF identity while retaining the WGMI ticker. The change substantially broadens the companies that can enter its portfolio and reflects the accelerating convergence between cryptocurrency mining and large-scale computing infrastructure.

WGMI will invest at least 80% of its net assets in companies materially involved in bitcoin mining and what CoinShares defines as digital power businesses. Eligible investments now include hyperscale data-centre operators, semiconductor companies serving AI workloads, electricity generators, energy infrastructure providers and businesses developing high-performance or quantum computing technology.

The fund does not invest directly in bitcoin, cryptocurrency derivatives or investment products that hold bitcoin. Its total expense ratio remains 0.75%.

The revised portfolio illustrates the scale of the change. As of August 19, WGMI held 29 securities and had assets under management of about $225.6 million. Cipher Digital was its largest position, valued at roughly $26.8 million, followed by AI infrastructure company Nebius Group at about $18.4 million.

WhiteFiber, IREN, Hut 8, Keel Infrastructure, Riot Platforms, CoreWeave, Hive Digital Technologies and TeraWulf were also among the fund’s ten largest holdings. The mix places established bitcoin miners alongside companies whose businesses are increasingly centred on AI cloud computing, data-centre capacity and access to electricity.

Bitcoin miners have become attractive participants in the AI infrastructure race because many already control large plots of land, substations, grid connections and power contracts. Those assets can take years for conventional data-centre developers to secure, particularly as electricity demand from generative AI creates bottlenecks around major computing markets.

The economics of bitcoin mining have added pressure to diversify. The April 2024 halving cut the block subsidy paid to miners from 6.25 bitcoin to 3.125 bitcoin. Another halving is expected around 2028, progressively increasing the importance of electricity costs, equipment efficiency and alternative revenue.

CoinShares chief executive Jean-Marie Mognetti said the distinction between miners and digital infrastructure businesses had been disappearing for two years. Many operators, he said, had already built the power agreements, cooling systems and engineering capabilities required for dense computing.

Several companies represented in WGMI demonstrate how rapidly the shift is developing.

Cipher Digital has signed long-term agreements to develop AI and high-performance computing capacity, including projects involving Amazon Web Services and AI cloud platform Fluidstack. Its Fluidstack arrangements at the Barber Lake campus in Texas are backed partly by Google and carry billions of dollars in contracted revenue over their initial terms.

The company has also been developing large-scale computing sites while retaining bitcoin mining operations, effectively transforming itself from a specialised cryptocurrency miner into a broader digital infrastructure operator.

Hut 8 has moved even further towards power and AI infrastructure. By August, it reported 949 megawatts of contracted IT capacity across its AI data-centre portfolio, supported by 1,330 MW of utility capacity. Base-term contracts associated with the portfolio have an aggregate value of about $26.6 billion.

Its Beacon Point campus in Nueces County, Texas, includes two 352 MW IT leases extending for 15 years. Hut 8 has described its strategy increasingly in terms of energy infrastructure, computing capacity and data-centre development rather than bitcoin production alone.

IREN, Hive Digital Technologies, Riot Platforms and TeraWulf have also explored or developed AI and high-performance computing businesses as demand for power-connected sites increases.

The transformation carries substantial risks. AI facilities demand different cooling, networking and reliability standards from bitcoin mines, while developments can require billions of dollars of financing before generating revenue. Power availability is also attracting greater regulatory scrutiny as data centres compete with households and other industries for electricity.

Arabian Post – Crypto News Network