26 min readThe CoinShares Valkyrie Bitcoin Miners ETF (WGMI) is an actively-managed ETF providing investors with a unique opportunity to gain targeted exposure to the Bitcoin mining industry. WGMI is managed by an expert team from Valkyrie Funds LLC dba CoinShares Valkyrie (the “Adviser”), a wholly owned subsidiary of CoinShares International Limited, a leading publicly listed investment management firm specializing in digital assets.
This article covers the benefits and risks of bitcoin mining, the opportunity for pure-play exposure to this growing industry, and how to add WGMI to your investment portfolio.
What is bitcoin mining?
Bitcoin mining is the process through which transactions are validated and added to the blockchain, a public ledger. This process also introduces new bitcoins into circulation. Miners utilize sophisticated hardware and software to solve complex mathematical problems set by the Bitcoin network's difficulty algorithm. The first miner to solve these problems is rewarded with bitcoins, providing an incentive for miners to participate in the network and maintain its integrity
Some Bitcoin miners have grown to be publicly listed companies, providing investors with an opportunity to gain exposure to this high-growth industry. By investing in these companies, investors can indirectly participate in the Bitcoin mining sector without needing to set up their own mining operations.
Benefits and Future Potential of the Bitcoin Mining Industry
Bitcoin miners play a crucial role in securing financial autonomy in a world where 79% of the population lives under regimes restricting fundamental liberties. They ensure transaction integrity in a decentralized system, independent of state-controlled financial systems. Additionally, Bitcoin mining is revitalizing rural America by repurposing abandoned industrial sites and creating jobs, with public data from miners showing that direct employment in U.S. mining nearly doubled from January 2022 to January 2024.
Miners also contribute to grid modernization by stabilizing power consumption during demand fluctuations, and the industry's natural preference for cheaper renewable energy, like wind and hydropower, aligns with global sustainability goals, reducing environmental impact and supporting renewable projects.
The U.S. leads global Bitcoin mining, accounting for 37% of activity in 2022, driven by favorable regulations, renewable energy resources, and a culture of innovation.
The Opportunity for ‘Pure-Play’ Exposures in Thematic Investing
‘Pure-play’ exposure in this context refers to investments in financial products like ETFs that are highly focused on a specific industry or sector, providing direct and concentrated exposure to a particular theme. For thematic investors, selecting pure-play ETFs ensures their investment closely aligns with their desired theme and that the ETF’s performance is driven by the unique factors affecting that sector.
To illustrate the advantages of pure-play ETFs in avoiding unwanted overlap and concentration risk, consider the following table comparing various crypto and blockchain industry ETFs and their overlap with the S&P 500:
By limiting the number of shared stocks and monitoring weights relative to popular equity indices, investors can use pure-play ETFs to gain a more targeted exposure to specific themes.
What is WGMI?
WGMI is a pure-play actively-managed Bitcoin miners ETF, providing exposure to companies engaged and involved in Bitcoin mining. This unique focus ensures that investors are directly exposed to the companies providing the infrastructure critical to the Bitcoin network's functionality and growth.
Key Details
Name: Valkyrie Bitcoin Miners ETF
Ticker: WGMI
Exchange: Nasdaq
Inception Date: February 7, 2022
Total Expense Ratio: 0.75% p.a.
Net Assets: $106,233,103.34 as of August 14, 2024
Advisor: Valkyrie Funds LLC dba CoinShares Valkyrie
Sub-Advisor: Vident Advisory LLC dba Vident Asset Management
Performance
The chart above reflects a hypothetical $10,000 investment in WGMI. Fund management fees were deducted. Past performance does not guarantee future results.
Performance quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted. All results are historical and assume the reinvestment of dividends and capital gains. Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Any applicable brokerage fees and commissions will reduce returns.
Investment Strategy
WGMI focuses on public companies within the Bitcoin mining industry, which are integral to the functionality of the Bitcoin network. The ETF leverages the expertise of Valkyrie Funds LLC dba CoinShares Valkyrie to identify and invest in the leaders in the Bitcoin mining industry and the companies that serve the industry.
Strict Selection Criteria
To maintain its pure-play status, WGMI adheres to stringent selection criteria. The fund invests at least 80% of its net assets (plus borrowings for investment purposes) in securities of companies that derive at least 50% of their revenue or profits from Bitcoin mining operations. Additionally, companies providing specialized chips, hardware, software, or other services to Bitcoin mining companies are eligible for inclusion. This ensures that only those truly involved in the Bitcoin mining ecosystem are part of the ETF, providing investors with targeted and thematic exposure.
Why Invest in WGMI?
Targeted Exposure to Bitcoin Mining: WGMI provides pure-play access to a vital component of the Bitcoin ecosystem—mining, without the dilution effect of unrelated sectors.
Managed by Experts: WGMI is managed by a team with deep expertise in digital assets and the mining industry, ensuring a well-researched investment approach.
Enhanced Diversification: WGMI invests in a diverse array of companies within the Bitcoin mining sector, allowing investors to gain direct exposure to the specific theme whilst enhancing overall portfolio diversification and reducing the risk of overlapping investments between other popular equity indices.
Risk Considerations
The performance of WGMI is closely tied to the overall health of the Bitcoin mining sector and the price of Bitcoin. Given the volatile nature of Bitcoin, the ETF's performance may experience significant fluctuations. Additionally, regulatory changes, technological advancements, and market sentiment towards Bitcoin and digital assets can impact the fund's performance.
For more information, please visit https://coinshares.com/etf/wgmi/
How to buy WGMI
For retail investors in the United States, purchasing the CoinShares Valkyrie Bitcoin Miners ETF (WGMI) is a straightforward process that can be done through most brokerage accounts. Here’s a step-by-step guide to help you buy WGMI:
1. Choose a Brokerage
To buy WGMI, you need an account with a brokerage that offers ETFs. Popular options include:
Charles Schwab
E*TRADE
Fidelity
Interactive Brokers
Pershing
Robinhood
Vanguard
If you don't already have an account, you can sign up for one on their respective websites or mobile apps.
2. Fund Your Account
Once your brokerage account is set up, you'll need to deposit funds. Ensure that you have enough funds to cover the amount you intend to invest in WGMI, as well as any potential brokerage fees.
3. Search for WGMI
In your brokerage account, use the search function to find ‘WGMI’ by entering its ticker symbol or other identifier. This will bring up the ETF's detailed information page, where you can review its performance, holdings, documents, and other relevant details.
4. Place an Order
When you're ready to purchase, you will need to place a buy order. Here are the steps to follow:
Select the Order Type: Choose between a market order (buying at the current market price) or a limit order (setting a specific price at which you're willing to buy).
Enter the Number of Shares: Specify how many shares of WGMI you want to purchase.
Review and Confirm: Double-check the order details, including the total cost, and confirm the purchase.
5. Monitor Your Investment
After buying WGMI, it's important to regularly monitor your investment. Consider diversifying your investments across different sectors and asset classes to reduce concentration risk.
CoinShares Valkyrie Bitcoin Miners ETF (WGMI) - Risks and Disclosures
Investing involves substantial risks. The loss of principal is possible. The Fund’s investment objectives, risks, charges and expenses should be considered before investing. The Fund may not be suitable for all investors. The prospectus contains this and other important information, and it may be obtained at https://valkyrie-funds.com/wgmi/wgmi-prospectus/. Read it carefully before investing.
Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Any applicable brokerage fees and commissions will reduce returns.
Management Risk. The Fund is subject to management risk because it is an actively managed portfolio. The Adviser will apply investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that the Fund will meet its investment objective.
Bitcoin Investing Risk. The Fund is indirectly exposed to the risks of investing in bitcoin through its investments in the portfolio companies.
Bitcoin is a new and highly speculative investment. The risks associated with bitcoin include the following:
Bitcoin is a new technological innovation with a limited history. There is no assurance that usage of bitcoin will continue to grow. A contraction in use of bitcoin may result in increased volatility or a reduction in the price of bitcoin, which could adversely impact the value of the Fund. The Bitcoin Network was launched in January 2009, platform trading in bitcoin began in 2010, and Bitcoin Futures trading began in 2017, each of which limits a potential shareholder’s ability to evaluate an investment in the Fund.
The Fund’s investments are exposed to risks associated with the price of bitcoin, which is subject to numerous factors and risks. The price of bitcoin is impacted by numerous factors, including:
The total and available supply of bitcoin, including the possibility that a small group of early bitcoin adopters hold a significant proportion of the bitcoin that has thus far been created and that sales of bitcoin by such large holders may impact the price of bitcoin;Global bitcoin demand, which is influenced by the growth of retail merchants’ and commercial businesses’ acceptance of bitcoin as payment for goods and services, the security of online bitcoin exchanges and public bitcoin addresses that hold bitcoin, the perception that the use and holding of bitcoin is safe and secure, the lack of regulatory restrictions on their use, and the reputation regarding the use of bitcoin for illicit purposes;
Global bitcoin supply, which is influenced by similar factors as global bitcoin demand, in addition to fiat currency (i.e., government currency not backed by an asset such as gold) needs by miners and taxpayers who may liquidate bitcoin holdings to meet tax obligations;
Investors’ expectations with respect to the rate of inflation of fiat currencies and deflation of bitcoin;
Foreign exchange rates between fiat currencies and digital assets such as bitcoin;
Interest rates;
The continued operation of bitcoin exchanges in the United States and foreign jurisdictions, including their regulatory status, trading and custody policies, and cyber security;
Investment and trading activities of large investors, including private and registered funds, that may directly or indirectly invest in bitcoin;
Regulatory measures, if any, that restrict the use of bitcoin as a form of payment or the purchase or sale of bitcoin, including measures that restrict the direct or indirect participation in the bitcoin market by financial institutions or the introduction of bitcoin instruments;
The maintenance and development of the open-source software protocol of the Bitcoin Network;
Increased competition from other cryptocurrencies and digital assets, including forks of the Bitcoin Network;
Developments in the information technology sector;
Global or regional political, economic or financial events and situations;
Investor or Bitcoin Network participant sentiments on the value or utility of bitcoin; and
The dedication of mining power to the Bitcoin Network and the willingness of bitcoin miners to clear bitcoin transactions for relatively low fees.
Negative developments in any of these factors could adversely impact an investment in the Fund.
A decline in the adoption of bitcoin could negatively impact the performance of the Fund. As a new asset and technological innovation, the bitcoin industry is subject to a high degree of uncertainty. The adoption of bitcoin will require growth in its usage for various applications that include retail and commercial payments, cross-border and remittance transactions, speculative investment and technical applications. Adoption of bitcoin will also require an accommodating regulatory environment. A lack of expansion in usage of bitcoin could adversely affect the bitcoin futures contracts in which the Fund invests. In addition, there is no assurance that bitcoin will maintain its value over the long-term. The value of bitcoin is subject to risks related to its usage. Even if growth in bitcoin adoption occurs in the near or medium-term, there is no assurance that bitcoin usage will continue to grow over the long-term. A contraction in use of bitcoin may result in increased volatility or a reduction in the price of bitcoin, which would adversely impact the value of the Fund’s shares. Recently, bitcoin has come under scrutiny for its environmental impact, specifically the amount of energy consumed by bitcoin miners. Some companies have indicated they will cease accepting bitcoin for certain kinds of purchases due to such environmental concerns. To the extent such concerns persist, the demand for bitcoin and the speed of its adoption could be suppressed.
Bitcoin trading prices are volatile and shareholders could lose all or substantially all of their investment in the Fund. Speculators and investors who seek to profit from trading and holding bitcoin generate a significant portion of bitcoin demand. Bitcoin speculation regarding future appreciation in the value of bitcoin may inflate and make the price of bitcoin more volatile. As a result, bitcoin may be more likely to fluctuate in value due to changing investor confidence in future appreciation in the price of bitcoin.
Regulation of participants in the bitcoin ecosystem continues to evolve in both the U.S. and foreign jurisdictions, which may restrict the use of bitcoin or otherwise impact the demand for bitcoin. As a technology, the Bitcoin Network is governed by its internal protocols and source code; however, the use by individuals or businesses of the Bitcoin Network and bitcoin may be subject to government regulation. Both domestic and foreign regulators and governments have increased focus on the use of the Bitcoin Network and bitcoin since 2013. In the U.S., federal and certain state authorities have exercised jurisdiction over specific uses of the Bitcoin Network and bitcoin, typically in the context of money service business regulation. Some foreign regulators and governments have exercised similar regulatory oversight; however, other jurisdictions have determined that regulatory action was premature or that the use of the Bitcoin Network should be prohibited or limited for reasons such as incompatibility with capital controls or financial system risks. Bitcoin market disruptions and resulting governmental interventions are unpredictable, and may make bitcoin illegal altogether. Future foreign regulations and directives may conflict with those in the U.S., and such regulatory actions may restrict or make bitcoin illegal in foreign jurisdictions. Future regulations and directives may impact the demand for bitcoin, and may also affect the ability of bitcoin exchanges to operate and for other market participants to enter into bitcoin transactions. To the extent that future regulatory actions or policies limit or restrict bitcoin usage, bitcoin trading or the ability to convert bitcoin to fiat currencies, the demand for bitcoin may be reduced, which may adversely affect investment in the Fund’s shares. Regulation of bitcoin continues to evolve, the ultimate impact of which remains unclear and may adversely affect, among other things, the availability, value or performance of bitcoin and, thus, the companies in which the Fund invests. Moreover, in addition to exposing the Fund to potential new costs and expenses, additional regulation or changes to existing regulation may also require changes to the Fund’s investment strategies. Although there continues to be uncertainty about the full impact of these and other regulatory changes, it is the case that the Fund may be subject to a more complex regulatory framework, and incur additional costs to comply with new requirements as well as to monitor for compliance with any new requirements going forward.
Sales of newly mined bitcoin may cause the price of bitcoin to decline, which could negatively affect an investment in the Fund. Approximately 900 newly mined bitcoin are created each day. If the parties engaged in bitcoin mining choose not to hold the newly mined bitcoin, and, instead, make them available for sale, there can be downward pressure on the price of bitcoin. A bitcoin mining operation may be more likely to sell a higher percentage of its newly created bitcoin, and more rapidly so, if it is operating at a low profit margin, thus reducing the price of bitcoin. Lower bitcoin prices may result in further tightening of profit margins for miners and worsening profitability, thereby potentially causing even further selling pressure. Decreasing profit margins and increasing sales of newly mined bitcoin could result in a reduction in the price of bitcoin, which could adversely impact an investment in the Fund.
Disruptions at bitcoin exchanges and potential consequences of a bitcoin exchange’s failure could adversely affect an investment in the Fund. Bitcoin exchanges operate websites on which users can trade bitcoin for U.S. dollars, other government currencies or other digital assets. Trades on bitcoin exchanges are unrelated to transfers of bitcoin between users via the Bitcoin Network. Bitcoin trades on bitcoin exchanges are recorded on the bitcoin exchange’s internal ledger only, and each internal ledger entry for a trade will correspond to an entry for an offsetting trade in U.S. dollars, other government currency or other digital asset. Bitcoin exchanges have a limited history. Since 2009, several bitcoin exchanges have been closed or experienced disruptions due to fraud, failure, security breaches or distributed denial of service attacks a/k/a “DDoS Attacks.” A DDoS attack is a malicious attempt to disrupt the normal traffic of network by overwhelming the target or its infrastructure with a flood of internet traffic. In many of these instances, the customers of such exchanges were not compensated or made whole for the partial or complete losses of their funds held at the exchanges. In 2014, the largest bitcoin exchange at the time, Mt. Gox, filed for bankruptcy in Japan amid reports the exchange lost up to 850,000 bitcoin, then valued then at over $450 million. Bitcoin exchanges are also appealing targets for hackers and malware. In August 2016, Bitfinex, a bitcoin exchange located in Hong Kong, reported a security breach that resulted in the theft of approximately 120,000 bitcoin valued at the time at approximately $65 million, a loss which was socialized and allocated to all Bitfinex account holders, regardless of whether the account holder held bitcoin or cash in their account. The potential for instability of bitcoin exchanges and the closure or temporary shutdown of exchanges due to fraud, business failure, hackers, DDoS or malware, or government-mandated regulation may reduce confidence in bitcoin, which may result in greater volatility in bitcoin.
Demand for bitcoin is driven, in part, by its status as the most prominent and secure cryptocurrency. It is possible that a cryptocurrency other than bitcoin (often referred to as “Altcoins”) could have features that make it more desirable to a material portion of the digital asset user base, resulting in a reduction in demand for bitcoin, which could have a negative impact on the price of bitcoin and adversely affect the companies in which the Fund invests. The Bitcoin Network and bitcoin, as an asset, hold a “first-to-market” advantage over other digital assets. This first-to-market advantage is driven in large part by having the largest user base and, more importantly, the largest combined mining power in use to secure the Blockchain and transaction verification system. Having a large mining network results in greater user confidence regarding the security and long-term stability of a digital asset’s network and its blockchain; as a result, the advantage of more users and miners makes a digital asset more secure, which makes it more attractive to new users and miners, resulting in a network effect that strengthens the first-to-market advantage. Bitcoin also enjoys significantly greater acceptance and usage than other digital asset networks in the retail and commercial marketplace, due in large part to the relatively well-funded efforts of payment processing companies. Despite the marked first-mover advantage of the Bitcoin Network over other digital assets, it is possible that an altcoin could become materially popular due to either a perceived or exposed shortcoming of the Bitcoin Network protocol that is not immediately addressed by the bitcoin developers or a perceived advantage of an altcoin that includes features not incorporated into bitcoin. For example, the development of digital self-executing contracts (also known as “smart contracts” or “DeFi”) on the Ethereum network has permitted the value of its native unit (ether) to rival bitcoin for periods of time. If an Altcoin obtains significant market share (either in market capitalization, mining power or use as a payment technology), this could reduce bitcoin’s market share and have a negative impact on the demand for, and price of, bitcoin.
Miners May Cease Expanding Processing Power to Create Blocks and Verify Transactions if They Are Not Adequately Compensated. Miners generate revenue from both newly created bitcoin (known as the “block reward”) and from fees taken upon verification of transactions. If the aggregate revenue from transaction fees and the block reward is below a miner’s cost, the miner may cease operations. An acute cessation of mining operations would reduce the collective processing power on the Blockchain, which would adversely affect the transaction verification process by temporarily decreasing the speed at which blocks are added to the Blockchain and make the Blockchain more vulnerable to a malicious actor obtaining control in excess of 50 percent of the processing power on the Blockchain. Reductions in processing power could result in material, though temporary, delays in transaction confirmation time. Any reduction in confidence in the transaction verification process or mining processing power may adversely impact the price of bitcoin. Furthermore, the block reward will decrease over time. In the summer of 2020, the block reward was reduced from 12.5 to 6.25 bitcoin, and it was further reduced to 3.125 bitcoin in 2024. As the block reward continues to decrease over time, the mining incentive structure will transition to a higher reliance on transaction verification fees in order to incentivize miners to continue to dedicate processing power to the Blockchain. If transaction verification fees become too high, the marketplace may be reluctant to use bitcoin. Decreased demand for bitcoin may adversely affect its price, which may adversely affect an investment in the Fund.
Bitcoin Network development contributors could propose amendments to the Bitcoin Network’s protocols and software that, if accepted and authorized by large groups of Bitcoin Network users, could adversely affect an investment in the Fund. The Bitcoin Network is an open-source project meaning that any developer or computer scientist may review, propose changes to and develop software clients for the Bitcoin Network protocols. Although a small group of individuals referred to as the Core Developers previously exercised significant influence over the direction of Bitcoin Network development, no single party or group controls what refinements or improvements to the Bitcoin Network’s source code are proposed, approved or produced as upgrades or new software clients for Bitcoin Network users. A software update or new software client may alter the protocols and software that govern the Bitcoin Network and the properties of bitcoin, including the irreversibility of transactions and limitations on the mining of new bitcoin. When a modification is introduced and a substantial majority of users and miners consent to the modification, the change is implemented and the Bitcoin Network remains uninterrupted. However, if less than a substantial majority of users and miners consent to the proposed modification, and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a “fork” (i.e., “split”) of the Bitcoin Network (and the Blockchain), with one prong running the pre-modified software and the other running the modified software. The effect of such a fork would be the existence of two versions of the Bitcoin Network running in parallel, but with each version’s underlying asset and blockchain lacking interchangeability. Additionally, a fork could be introduced by an unintentional, unanticipated software flaw in the multiple versions of otherwise compatible software users run. Although several chain forks have been addressed by community-led efforts to merge the two chains, such a fork could adversely affect Bitcoin’s viability. It is possible, however, that a substantial number of Bitcoin users and miners could adopt an incompatible version of Bitcoin while resisting community-led efforts to merge the two chains. This would result in a permanent fork. On August 1, 2017, after extended debates among developers as to how to improve the Bitcoin network’s transaction capacity, the Bitcoin network was forked by a group of developers and miners resulting in the creation of a new blockchain, which underlies the new digital asset “Bitcoin Cash” alongside the original Bitcoin Blockchain. Bitcoin and Bitcoin Cash now operate on separate, independent blockchains. Although the Bitcoin Network remained unchanged after the fork, it is unclear how such actions will affect the long-term viability of bitcoin and, accordingly, may adversely affect an investment in the Fund.
The decentralized structure of Bitcoin Network software development may prevent the formation of a consensus on how to improve and modify the Bitcoin Network, which could prevent needed or desirable updates and thereby adversely impact an investment in the Fund. The lack of a formal or informal centralized structure in the development of Bitcoin Network means that parties with potentially competing motives and incentives must generate a consensus on how best to improve key elements of the Bitcoin Network protocols, such as how best to increase the transaction capacity of the Bitcoin Network. If developer proposals to improve the Bitcoin Network’s protocols are incapable of obtaining an overwhelming consensus for adoption, a proposal may either be abandoned or indefinitely delayed pending the formation of consensus or the proposal may result in a fork. If a desirable or necessary improvement to the Bitcoin Network protocols is not implemented, it may have a negative impact on the functioning of the Bitcoin Network or the growth of user adoption. Any such delay may, therefore, have a negative impact on the secondary market price of bitcoin and the companies in which the Fund invests.
The open-source structure of the Bitcoin Network protocol means that the contributors to the protocol are generally not directly compensated for their contributions in maintaining and developing the protocol. A failure to properly monitor and upgrade the protocol could damage the Bitcoin Network and, therefore, an investment in the companies in which the Fund invests. As the Bitcoin Network protocol is not sold and its use does not generate revenues for contributors, contributors are generally not compensated for maintaining and updating the Bitcoin Network protocol. Although some bitcoin industry participants have funded core developers, this type of financial incentive is not typical. The lack of guaranteed financial incentive for contributors to maintain or develop the Bitcoin Network and the lack of guaranteed resources to adequately address emerging issues with the Bitcoin Network may reduce incentives to address the issues adequately or in a timely manner. This may have a negative impact on the secondary market price of bitcoin and an investment in the Fund.
Intellectual property rights claims may adversely affect the operation of the Bitcoin Network. Third parties may assert intellectual property claims relating to the holding and transfer of digital assets and their source code. Regardless of the merit of any intellectual property or other legal action, any threatened action that reduces confidence in the Bitcoin network’s long-term viability or the ability of end-users to hold and transfer bitcoin may adversely affect an investment in the Fund. Additionally, a meritorious intellectual property claim could prevent end-users from accessing the Bitcoin Network or holding or transferring their bitcoin. As a result, an intellectual property claim could adversely affect an investment in the companies in which the Fund invests
A malicious actor may attack the Bitcoin Network in an effort to prevent its function, which may adversely impact an investment in the Fund. A malicious actor may attack the Bitcoin Network in a number of ways, including a “50 Percent Attack” or a spam attack. If a malicious actor obtains a majority of the processing power (referred to herein as “aggregate hashrate”) dedicated to mining on the Bitcoin Network, it will be able to exert unilateral control over the addition of blocks to the Blockchain. As long as the malicious actor enjoys this majority it may be able to “double-spend” its own bitcoin (i.e., spend the same bitcoin in two or more conflicting transactions) as well as prevent the confirmation of other Bitcoin transactions. If such a scenario were to materialize, it could adversely affect an investment in the Fund. More simply, a malicious actor could attempt to flood the pool of unconfirmed transactions (known as the “mempool”) with tens of thousands of transactions in an effort to significantly slow the confirmation of legitimate transactions across the Bitcoin Network. Such a delay, if sustained for extended periods of time, could negatively impact the secondary market price of Bitcoin. These or any other form of attack on the Bitcoin Network could adversely affect an investment in the companies in which the Fund invests.
In the event of widespread disruption to the Internet, the market for bitcoins may become dangerously illiquid. The Bitcoin Network’s functionality relies on the Internet. A significant disruption of Internet connectivity affecting large numbers of users or geographic areas could impede the functionality of the Bitcoin Network and adversely affect the companies in which the Fund invests. In addition, certain features of the Bitcoin Network, such as decentralization, open source protocol,
This is a new ETF with limited operating history.
Cryptocurrencies are subject to unique and substantial risks, including significant price volatility and lack of liquidity.
The value of a cryptocurrency may decline significantly without warning, including to zero.
Cryptocurrencies are largely unregulated and cryptocurrency-linked investments may be more susceptible to fraud and manipulation than more regulated investments.
If a fund’s ability to obtain exposure to cryptocurrency-linked investments consistent with their investment objectives is disrupted for any reason, including as a result of a lack of liquidity, volatility, or a disruption in the cryptocurrency or cryptocurrency futures market, or as a result of margin requirements, position limits, or other conditions, factors, or limitations of a particular fund, the fund may not be able to achieve its investment objective and may experience significant losses.
The Fund is distributed by ALPS Distributors, Inc.
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