BITQ: A Crypto Fund…Or Is It?

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Right. So, the Bitwise Crypto Industry Innovators ETF (BITQ 6.45%). It sounds sensible, doesn’t it? A way to dip a toe into the cryptocurrency ocean without, you know, actually understanding blockchain. I thought so too. I mean, I’ve got a perfectly good life, a reasonably stable career, and a growing sense of panic about missing out on the next big thing. Which, apparently, is AI. Or crypto. Or maybe AI powered by crypto. It’s all a bit blurry.

The problem is, Bitcoin. Honestly, it’s exhausting. Down 20% over the last year, mostly in the last week. It’s enough to make one consider a life of quiet desperation, possibly involving knitting and a vow of silence. But, weirdly, BITQ itself is…flat year to date? And it tripled from its low last year. Which is…confusing. It’s like the fund is secretly powered by some sort of financial alchemy. Or maybe it’s not a crypto fund at all?

Turns out, it’s…an AI fund? Seriously? It’s like ordering a latte and getting a kale smoothie. Not entirely unpleasant, but not what you expected. Eight of its top ten holdings are crypto mining companies, but they’re pivoting to AI infrastructure. Apparently, digging for digital gold is so last year. Now it’s all about building the servers that power the digital gold. It’s a subtle difference, but it feels…important.

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Iren is the biggest chunk of the fund, almost 15%. Then there’s Applied Digital and Cipher Mining, making up another 12% combined. They’ve already got deals with tech companies wanting to scale their AI ambitions. It all sounds very impressive, but I can’t help but wonder if I’m just being led down a rabbit hole of tech jargon.

Coinbase Global and Strategy are the only actual crypto companies in the top ten. The rest are all these mining companies trying to reinvent themselves. It’s a bit like watching a mid-life crisis unfold in the stock market.

Five of the top ten have doubled in the last year. And they make up two-thirds of the fund’s assets. So, if this AI thing takes off, BITQ should do well. But then again, what if AI turns out to be a fad? What if we all end up ruled by sentient toasters? It keeps me up at night, honestly.

The Expense Ratio: A Moment of Truth

Right, let’s talk money. The expense ratio is 0.85%. Which is…a lot. It means that for every $10,000 you invest, you’re handing over $85 a year in fees. It’s like paying a small ransom for the privilege of participating in the market. You could get index funds with expense ratios below 0.1%. But then again, those are boring.

The fund only has 30 holdings, which makes it relatively easy to replicate. Mastercard only makes up 1% of the portfolio, so it’s hardly steering the ship. You could theoretically cherry-pick the best stocks and build your own portfolio. But then again, who has the time? And the willpower to resist the urge to buy more shoes?

If BITQ outperforms the S&P 500 by a wide margin, the expense ratio is probably worth it. But it’s flat year to date. So, you’re stuck paying the fee regardless. It feels a bit like being trapped in a subscription service you no longer need.

Units of Cryptocurrency Lost: 12. Hours Spent Watching Charts: 9. Number of Panicked Texts to Friends: 24. Will become disciplined long-term investor: Still working on it.

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2026-02-05 10:32