Valkyrie Bitcoin Mining ETF Faces Significant Losses in 2025

According to CoinDesk, CoinShares' Valkyrie Bitcoin Mining (WGMI) exchange-traded fund (ETF) has emerged as the worst-performing ETF of 2025, experiencing a 43% decline year-to-date. This ETF comprises several publicly traded bitcoin miners, with IREN (IREN) being the largest holding at 15%, which has seen a 42% drop. Core Scientific (CORZ) follows closely with a 14% weighting and a 48% decline, while Cipher Mining (CIFR), the third-largest holding at 9.6%, has decreased by 52%. Even NVIDIA (NVDA), the sixth-largest holding at 5%, has not been immune to the downturn, falling over 20% this year. The ETF's investment strategy focuses on companies that derive at least 50% of their revenue or profits from bitcoin mining operations 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 stark contrast, metals ETFs have been the top performers of 2025, with several gold mining ETFs ranking in the top five. Notably, the Equity World Basic Materials DAXglobal Gold Miners ETF has risen by 38% year-to-date. Bitcoin miners have encountered significant challenges this year, as the network hash rate, which represents the computational power required to mine bitcoin, continues to climb, nearing all-time highs around 832 EH/s. This has led to a notable divergence between bitcoin’s price and the hash rate. Consequently, mining difficulty has remained close to its peak, making it increasingly difficult for miners to successfully mine new bitcoins. Additionally, transaction fees have remained extremely low, further squeezing miner profitability as rewards from processing transactions remain minimal.