Bitcoin is succumbing to some profit-taking and speculation regarding the Federal Reserve’s outlook for September interest rate cuts. But shares of cryptocurrency miners have been somewhat resilient relative to their histories of tumbling when bitcoin retreats.
For example, the CoinShares Valkyrie Bitcoin Miners ETF (WGMI) is off less than 1% for the week ending August 21. That’s not terrible when considering bitcoin’s retrenchment. WGMI’s relative sturdiness could be the result of miners spreading their business wings while realizing improved economics via pooling of graphics processing units (GPUs) needed in proof of work (PoW) mining.
“Following Ethereum’s shift away from PoW, demand for GPUs fell sharply, prompting a wave of hardware decommissioning and consolidation,” noted CoinShares. “Today, most miners rely on pools to reduce income variability, as solo mining on smaller PoW chains carries high risk and often yields delayed or inconsistent returns.”
Dual-Use Computing a Catalyst for Bitcoin Miners ETF WGMI
One of the emerging and arguably most compelling trends pertaining to crypto miners, including WGMI member firms, is the concept of dual-use computing. Eliminating the tech jargon, that’s basically the concept of miners applying their crypto extraction competencies to other areas of tech; namely, artificial intelligence (AI) and hyper-computing.
A prime example of that trend materialized two weeks ago, when shares of WGMI holding TeraWulf (WULF) surged on news of Alphabet (GOOGL) taking an equity stake in the miner to bolster its AI plans. Hive Digital Technologies (HIVE) is another example of a WGMI constituent that’s branching out.
“As mining margins tighten, operators are repurposing infrastructure for dual-use applications. One example is Hive Digital Technologies, which uses its GPU arrays for machine learning tasks during crypto market downturns,” added CoinShares. “These GPUs switch back to PoW mining when token prices rise, offering a flexible model that balances blockchain validation with AI compute contracts. This approach improves capital efficiency and reduces reliance on volatile mining revenues.”
Unbeknownst to some investors is the fact that bitcoin miners are also establishing footprints in the fast-growing renewable energy industry. As CoinShares points out, some clean energy firms are tapping bitcoin technology to improve solar infrastructure.
“By dynamically shifting surplus solar power between the grid, battery storage, and mining hardware, this model ensures profitability by minimizing energy waste,” according to WGMI’s issuer.
Bottom Line
Undoubtedly, there was a time when crypto miners were all about mining digital currency. But that era is in the past. These days, WGMI holdings have multiple revenue streams. And that concept arguably isn’t yet fully appreciated by market participants.
For more news, information, and strategy, visit the CoinShares Crypto ETF Hub.
