A Crypto Mining ETF to Know About

There isn’t a crypto ETF yet, but this is a close alternative

Image courtesy of sectigostore.com

Crypto mining is the process of generating cryptocurrencies, such as Bitcoin and Ethereum, by solving computational puzzles. The computational puzzles are essentially complex mathematical problems that require a computer set-up with a capable graphics processing unit or application-specific integrated circuit to solve them successfully. Crypto mining has grown into its own industry where companies set up dedicated facilities to mine cryptocurrencies for profit. Some companies have transitioned to providing the necessary infrastructure crypto mining companies need for their dedicated facilities. Recently, an ETF has launched that provides exposure to the publicly-traded companies involved in the crypto mining industry. That ETF is the Viridi Cleaner Energy Crypto-Mining & Semiconductor ETF (RIGZ).

RIGZ is an actively managed ETF focused on the crypto mining industry. The ETF launched on July 20th, 2021. RIGZ was created by Viridi to align profits with purpose. The firm noticed that a growing number of investors were looking to gain exposure to cryptocurrencies through a publicly-traded product. In addition to investors wanting to gain exposure to cryptocurrencies, they also wanted to gain exposure to the sustainable leaders of crypto mining in the United States. Over 50% of North American Bitcoin mining is done using renewable energy sources. RIGZ provides exposure to some of those companies.

The holdings of RIGZ include crypto mining companies, manufacturers of crypto mining hardware, and producers of graphic processing units and application-specific integrated circuits. Marathon Digital Holdings, Bitfarms, Hut 8 Mining, Samsung Electronic, and Nvidia are examples of RIGZ’s top holdings. As of July 28th, 2021, RIGZ has a price of $29.63 and an expense ratio of 0.90%. It is fair to say that the expense ratio is pretty high. It is still too early to dive into its performance. Still, with the research Viridi has conducted and the optimistic future that many have with cryptocurrencies as more institutions are getting involved with them, it can be fair to expect a strong performance in the ETF over the next three to five years.

RIGZ brings an interesting alternative to investors who are eagerly waiting for a cryptocurrency-based ETF. Will there eventually be cryptocurrency-based ETFs once the Securities Exchange Commission decides that it is a safe enough vehicle for investors who are willing to take the risk? I believe so. If there are publicly-traded trusts that provide exposure to cryptocurrencies such as GBTC and ETHE, there is some evidence that a cryptocurrency-based ETF can survive. For now, investors can look to RIGZ as an alternative to a cryptocurrency-based ETF. If you believe RIGZ is of value to your portfolio for the long run, make sure you have conducted your research and due diligence to decide that for yourself.

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