There was a time when so-called experts advised retail investors against buying stocks trading below $10. That “wisdom” was heightened regarding sub-$5 names. The price is low for a reason, they’d claim. But not all borderline stocks deserve obituaries. Some may even offer market participants rebound opportunities while contributing to upside for the ETFs in which those stocks reside. Take the case of Bitfarms (BITF). It’s one of the largest holdings in the CoinShares Valkyrie Bitcoin Miners ETF (WGMI).
WGMI is coming off a scorching September run in which it jumped 44.48%. Bitfarms, the ETF’s fourth-largest component, is a key reason behind WGMI’s recent ascent. Even with a sharp pullback, the small-cap crypto miner more than doubled last month. It’s possible Bitfarms’ bullishness will extend, helped by enthusiastic retail traders attempting to “meme” the WGMI holding.
Bitfarms Could Continue Boosting Bitcoin Miners ETF WGMI
In recent weeks, there have been overt clues on some trading forums, including StockTwits, that there’s an army of Bitfarms-believer retail traders.
“Retail sentiment sentiment on Stocktwits trending in ‘extremely bullish’ territory, accompanied by retail chatter at ‘extremely high’ levels over the past day. These are the highest sentiment and chatter levels the stock has clocked on the platform over the past year,” according to StockTwits.
Yes, the WGMI holding is volatile. Even with the benefit of a gain of nearly 9% over the past week, the stock closed 21.67% below its 52-week high on September 30. That high was notched on September 19, indicating Bitfarms can taketh away as rapidly as it giveth.
For investors wondering if Bitfarms can reclaim those highs and perhaps travers to $4 or even $5, there’s not a clear answer. But another rally is possible. That’s because the WGMI holding has some arguably underappreciated tailwinds — some that have applied to other WGMI member firms.
The Bitfarms rally commenced last month “after Nebius Group announced a five-year agreement to supply Microsoft (MSFT) with $17.4 billion worth of GPUs, a deal aimed at bolstering Microsoft’s artificial intelligence infrastructure. The news fueled enthusiasm for companies with large-scale computing power, including Bitcoin (BTC) miners,” reported StockTwits.
Said another way, like other WGMI holdings, Bitfarms is showing investors it’s making credible, potentially lucrative moves into the worlds of AI infrastructure and high-performance computing. Bitfarms has already demonstrated it can grow noncrypto mining revenue at a material rate. That could be a sign that if more of the same is in store, the stock could trend higher, perhaps taking WGMI along for the ride.
For more news, information, and strategy, visit the CoinShares Crypto ETF Hub.
