Bitcoin ETFs: A Mildly Improbable Investment

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The universe, as we know, is a profoundly illogical place. And yet, here we are, discussing financial instruments designed to track the price of digital tokens conjured into existence by an anonymous entity known only as Satoshi Nakamoto. It’s… well, it’s a bit much, isn’t it? Specifically, we’re examining two ETFs: the Fidelity Wise Origin Bitcoin Fund (FBTC +0.12%) and the CoinShares Bitcoin Mining ETF (WGMI +4.71%). Both offer a route to exposure to Bitcoin (BTC 0.76%), but they approach the problem with differing degrees of directness—and, consequently, differing levels of existential bewilderment.

FBTC, in essence, is a fairly straightforward proposition: it holds actual Bitcoin. (Imagine the paperwork. The sheer logistical challenge of securing digital keys. It’s enough to make one long for the simplicity of bartering with seashells.) WGMI, on the other hand, invests in the companies that mine Bitcoin. (Which, let’s be honest, is just a fancy way of saying they solve very complicated math problems with electricity. A remarkably inefficient process, when you think about it.)

Snapshot (Cost & Size)

Metric FBTC WGMI
Issuer Fidelity CoinShares
Expense Ratio 0.25% 0.75%
1-yr Return (as of Jan. 24, 2026) -14.53% 92.48%
AUM $17.41 billion $341.93 million

As you can see, WGMI comes with a slightly heftier price tag (the expense ratio, that is, not the existential dread). However, it has recently demonstrated a considerably more enthusiastic upward trajectory. (Perhaps the miners are discovering a more efficient algorithm? Or perhaps they’ve simply stumbled upon a particularly lucky sequence of random numbers.)

Performance & Risk Comparison

Metric FBTC WGMI
Max Drawdown (2 yr) -32.64% -62.79%
Growth of $1,000 over 2 years $1,922 $2,604

The numbers suggest that WGMI is the more volatile option. (Which, in the grand scheme of things, is hardly surprising. Investing in companies that rely on the fluctuating value of a digital currency is a bit like building a house on a cloud.) However, it has also delivered a higher return over the past two years. (Though, as any seasoned investor knows, past performance is no guarantee of future results. Especially when dealing with something as inherently unpredictable as Bitcoin.)

What’s Inside

WGMI’s portfolio consists of 25 companies, primarily in the technology sector. Key holdings include IREN Ltd. (IREN +8.46%), Cipher Mining (CIFR +1.03%), and Hut 8 Corp. (HUT +5.62%). It has been trading for almost four years, achieving an approximate 87.56% price increase.

FBTC, by contrast, is a remarkably simple beast: it simply tracks the price of Bitcoin itself. Barely two years old, it has risen 85.57% since inception. (Which, given the volatility of Bitcoin, is either a sign of remarkable stability or a prelude to an even more dramatic plunge. It’s difficult to say.)

What This Means for Investors

Let’s be clear: investing in crypto-related ETFs carries inherent risks. FBTC, in particular, is a relatively young fund with a singular focus on Bitcoin. (Which means its price is entirely dependent on the whims of the market and the continued existence of the internet.) WGMI, while diversified across multiple companies, is still heavily exposed to the crypto market. (Which means it’s susceptible to the same unpredictable forces.)

Neither fund provides a beta measurement (a measure of volatility relative to the S&P 500). This is likely due to their short trading history. (Five years of data is, apparently, required to determine how much a fund will bounce around. A rather arbitrary requirement, if you ask me.)

Interestingly, WGMI may gradually shift away from being a pure Bitcoin mining ETF. Many mining companies are diversifying into high-performance computing and AI data centers. (Perhaps realizing that solving complex math problems for the benefit of a decentralized currency isn’t the most sustainable business model.) If you’re comfortable with this transition, it could be a viable option for indirect exposure to the crypto market.

Glossary

ETF (Exchange-traded fund): A fund that trades on stock exchanges like a stock, holding a basket of assets. (Think of it as a pre-packaged investment portfolio. Convenient, but slightly lacking in personal touch.)
Spot bitcoin ETF: An ETF that holds actual bitcoin, aiming to track its market price directly. (The digital equivalent of stuffing gold bars under your mattress.)
Bitcoin mining: The process of validating bitcoin transactions and creating new coins using specialized computing hardware. (A remarkably energy-intensive process. One wonders if it’s worth it.)
Crypto-infrastructure companies: Businesses providing hardware, software, or services that support cryptocurrency networks and mining operations. (The unsung heroes of the digital revolution.)
Expense ratio: Annual fund operating costs expressed as a percentage of the fund’s average assets. (The price you pay for convenience.)
Assets under management (AUM): The total market value of assets a fund or manager oversees for investors. (A measure of popularity, mostly.)
1-year return: The fund’s total percentage gain or loss over the most recent 12-month period. (A snapshot in time. Meaningless in the long run.)
Total return: Investment performance including price changes plus any income or distributions, assuming reinvestment. (The bottom line. More or less.)
Beta: A measure of an investment’s volatility compared with a benchmark index, typically the S&P 500. (A statistically dubious attempt to predict the unpredictable.)
Max drawdown: The largest peak-to-trough percentage loss over a specified time period. (A sobering reminder that investments can go down as well as up.)
Volatility: The degree to which an investment’s price moves up and down over time. (The spice of life. Or the source of endless anxiety.)
Diversification: Spreading investments across different assets to reduce the impact of any single holding’s performance. (Don’t put all your eggs in one digital basket.)

For more guidance on ETF investing, check out the full guide at this link.

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2026-01-25 07:54