The CoinShares Bitcoin Mining ETF (WGMI) reached a record high, driven by the surge in AI stocks and a major deal between Nebius Group and Microsoft, indicating strong investor confidence in the intersection of crypto mining and AI.

Executive Summary

The CoinShares Bitcoin Mining ETF (WGMI) experienced a significant surge, reaching a record high of $33.13. This 44% year-to-date increase was primarily fueled by the strong performance of AI-related stocks and a substantial agreement between Nebius Group and Microsoft.

The Event in Detail

WGMI, an actively managed ETF traded on Nasdaq, invests in companies involved in Bitcoin mining operations. Its top holdings include IREN Ltd and Cipher Mining Inc, which have both contributed significantly to the ETF's recent gains. The ETF does not invest directly in Bitcoin, offering a regulated exposure to the crypto mining sector with a total expense ratio of 0.75%.

Nebius Group's $17.4 billion agreement to supply GPUs to Microsoft for AI infrastructure expansion has further propelled the rally in crypto mining stocks. This deal highlights the increasing convergence of the crypto mining and AI sectors.

Oracle's cloud revenue growth forecast, which increased to 77% due to high AI demand, also played a crucial role in the positive momentum. Oracle's total backlog increased 359% to $455 billion, implying a prior backlog near $99.1 billion based on the stated growth rate.

Market Implications

The surge in WGMI and related stocks underscores the growing investor interest in the intersection of crypto mining and AI. As traditional Bitcoin mining faces pressure from halving cycles, mining companies are increasingly pivoting towards AI infrastructure and data center services. This shift is reflected in the market's response to the Nebius-Microsoft deal, where companies with large-scale computing infrastructure saw significant gains.

The disconnect between mining stock performance and Bitcoin price action suggests that market attention is shifting towards mining infrastructure's potential role in AI development, rather than solely focusing on cryptocurrency price movements.

Expert Commentary

"Market attention is shifting toward mining infrastructure’s potential role in AI development rather than just cryptocurrency price movements."

This quote encapsulates the sentiment that the value proposition of crypto mining firms is evolving beyond just Bitcoin production.

Broader Context

The AI crypto market is projected to grow from $3.7 billion in 2024 to $46.9 billion by 2034, demonstrating the transformative potential of AI in the crypto mining industry. Companies are now leveraging AI optimization, low-cost infrastructure, and renewable-powered operations to cut mining costs and boost profitability. The convergence of AI, renewable energy, and regulatory tailwinds is creating a new paradigm for crypto mining.