What factors contribute to the poor performance of the Valkyrie Bitcoin Mining ETF in 2025? How does the decline in individual holdings, such as IREN and Core Scientific, impact the overall performance of the ETF? What challenges are bitcoin miners facing this year, and how do these challenges relate to the network hash rate and mining difficulty? In what ways do the performance and strategy of the WGMI ETF differ from the successful metals ETFs in 2025?
CoinShares’ Valkyrie Bitcoin Mining (WGMI) exchange-traded fund (ETF) is the worst-performing ETF of 2025, down 43% year-to-date, according to Senior Bloomberg ETF analyst Eric Balchunas. The ETF is made up of several publicly traded bitcoin (BTC) miners. IREN (IREN) is the largest holding at 15%, which is down 42%. Core Scientific (CORZ) follows with a 14% weighting and a 48% decline, while Cipher Mining (CIFR), the third-largest holding at 9.6%, is down 52%. Even NVIDIA (NVDA), the sixth-largest holding at 5%, has dropped over 20% this year.
According to its investment strategy, "The ETF will invest in companies that derive at least 50% of their revenue or profits from bitcoin mining operations and/or from providing specialized chips, hardware, software, or other services to companies engaged in bitcoin mining." WGMI consists of 21 holdings and manages $147.2 million in total assets.
In contrast, metals ETFs have been the top performers of 2025, according to justETF. Several gold mining ETFs rank in the top five, with the Equity World Basic Materials DAXglobal Gold Miners ETF up 38% year-to-date.
Bitcoin miners have faced significant challenges this year, as the network hash rate—representing the computational power required to mine bitcoin—continues to climb, hovering near all-time highs around 832 EH/s. This has created a notable divergence between bitcoin’s price and the hash rate.
As a result, mining difficulty has also remained close to its peak, making it harder for miners to successfully mine new bitcoins. At the same time, transaction fees are extremely low, further squeezing miner profitability as rewards from processing transactions remain minimal.
CoinShares Valkyrie BTC Mining (WGMI) ETF: The Dismal Performance of 2025
In the rapidly evolving financial landscape of 2025, where investors continuously seek opportunities in cryptocurrency and technology, the CoinShares Valkyrie BTC Mining (WGMI) ETF has stood out — though not for the reasons its creators intended. As of this writing, it has emerged as the worst-performing ETF of the year, drawing attention and prompting discussions about the challenges and pitfalls of investing in the bitcoin mining space.
A Promising Start
Launched with high hopes, the CoinShares Valkyrie BTC Mining ETF aimed to capitalize on the burgeoning interest in Bitcoin and cryptocurrencies. With institutions and retail investors alike expressing interest in crypto assets, WGMI sought to provide a vehicle for exposure to the mining sector, a key component of the Bitcoin ecosystem. The ETF was designed to capture the performance of companies involved in the mining of bitcoin, aiming to leverage the rising value of Bitcoin and the demand for energy in the process.
Early in its existence, WGMI attracted significant attention, with its unique proposition appealing to investors looking to balance their portfolios with digital assets. The promise of growth was palpable; Bitcoin seemed poised on the verge of new highs, and the mining sector was seen as a gateway to benefiting from this upward momentum.
The Decline Begins
However, as the months of 2025 unfolded, the ETF faced numerous unforeseen challenges, leading to its downturn. Regulatory challenges against cryptocurrency and mining operations started to mount globally. Certain countries implemented stringent regulations on bitcoin mining, focusing on its environmental impacts and energy consumption. This created uncertainty surrounding the profitability and viability of mining companies, directly affecting the performance of WGMI.
Moreover, as the year progressed, Bitcoin itself suffered significant volatility. After recovering from earlier lows, it encountered a series of price corrections that sent shockwaves through the entire crypto market. Investors, drawn by the hype, quickly lost their confidence as they saw their capital dwindle. The price of Bitcoin, which is critical to the economic success of mining operations, impacted all constituent stocks of the ETF.
The IT Factor
Adding to the misfortunes, much of the mining industry faced operational challenges. Technological advances such as newer, more efficient mining rigs were implemented at a rapid pace. Established players in the mining industry began to significantly upgrade their infrastructure to mine more efficiently, but many companies held on to outdated equipment that could not compete effectively.
In many ways, WGMI became a reflection of a broader challenge within the sector—historically low margins and extraordinarily high operating costs due to electricity prices, equipment costs, and the aforementioned regulatory changes. Without the necessary technological upgrades, many of the ETF’s holdings struggled to maintain profitability, leading to significant overall losses.
Market Sentiment and Competitive Landscape
The competitive landscape further complicated matters. The entrance of new competitors, who could operate more efficiently with advanced technology, squeezed profit margins for many existing mining firms. This dynamic evolved in a market where investors became risk-averse and more discerning about where they placed their money.
Despite being framed as a specialized ETF, WGMI could not escape the broader market sentiment towards cryptocurrencies. Many investors began to shun crypto-related equities in favor of more stable and predictable investments like traditional stocks and bonds, especially as interest rates continued to rise in response to inflationary pressures worldwide. The steady outflow of capital from WGMI starkly highlighted the changing investment landscape.
Investor Discontent
As 2025 progressed, the investor sentiment towards WGMI plummeted. What began as a promising venture turned into a cautionary tale. Financial analysts began to closely scrutinize the ETF, dissecting its performance against benchmarks that had been previously established for the cryptocurrency mining sector.
The performance metrics were grim. WGMI recorded returns that were not just negative; they were historically low, often outpaced by simple indices, or even meme stocks that otherwise had no basis other than short-term speculation. Such performance saw an outcry from investors who had bought into the initial hype surrounding both Bitcoin and the mining ETF.
Conclusion
The downfall of the CoinShares Valkyrie BTC Mining (WGMI) ETF in 2025 serves as a stark reminder of the volatility that plagues the cryptocurrency markets and, by extension, the companies involved in mining them. Whether caused by regulatory issues, technical challenges, or changing investor sentiment, the lessons from WGMI’s performance are manifold. Investors are left reflecting on the merits of diversified portfolios and seeking to understand the underlying assets they choose to fund.
As we look toward the future, WGMI’s trajectory serves as a critical case study in cryptocurrency investment risks. The challenges faced not only echo through the corridors of financial institutions but also resonate with the individual investors who took a chance on the mining sector. It underscores the pressing need for due diligence and a comprehensive understanding of the market dynamics that govern the cryptocurrency world.
CoinShares Valkyrie BTC Mining (WGMI) ETF has faced significant challenges in 2025, leading it to be labeled the worst-performing ETF of the year. Various factors contributed to its underperformance, including a decline in Bitcoin prices, increasing competition in the cryptocurrency mining sector, and regulatory hurdles impacting the broader ETF market.
Investors expressed concerns about the sustainability of the mining business model, particularly as operational costs surged amid fluctuating energy prices. Additionally, the ETF struggled to attract capital as market sentiment turned bearish, with many opting for more established investment vehicles.
Despite these challenges, there are signs that the cryptocurrency sector may rebound in the future, potentially offering new opportunities. The landscape is constantly changing, and market conditions can shift, leading to different outcomes for investment products. Investors will need to carefully assess future trends and developments in the cryptocurrency mining space before making decisions.