WGMI vs. HODL: Same Crypto, Wildly Different Results

VanEck Bitcoin ETF (NYSEMKT:HODL) and CoinShares Bitcoin Mining ETF (NASDAQ:WGMI) both tap into Bitcoin's growth, but HODL offers direct exposure to the cryptocurrency while WGMI targets the broader Bitcoin mining ecosystem, with notable differences in cost, risk profile, and diversification.

Both funds appeal to investors interested in the Bitcoin space, but their approaches diverge: HODL is a single-asset fund physically backed by Bitcoin, aiming to mirror its price, while WGMI holds a basket of companies generating revenue from Bitcoin mining or related services. This analysis compares their structure, performance, cost, and risk to help clarify which may fit different risk appetites or investment goals.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.

WGMI charges a higher fee than HODL, making the latter more affordable for long-term holders. Yield data are not available for either fund, so payout is not a differentiator in this comparison.

What's inside

WGMI focuses on companies at the intersection of financial services and technology, with 81% of assets in financials, 18% in tech, and 1% in utilities. Its portfolio holds 24 names, led by IREN (NASDAQ:IREN), Cipher Mining (NASDAQ:CIFR), and Hut 8 (NASDAQ:HUT) and the fund has a 3.9-year track record. It does not invest directly in Bitcoin, but instead in the infrastructure and service providers that support the mining industry.

HODL, by contrast, is a pure-play vehicle holding only Bitcoin, with no sector diversification or exposure to operating companies. This makes it highly sensitive to Bitcoin's price movements, with a sector breakdown not reported and 100% of assets allocated to Bitcoin. Neither ETF features leverage, derivatives, or other structural quirks.

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What this means for investors

Cryptocurrency ETFs like these are relatively new investment vehicles, and come with extreme volatility that investors need to understand before buying. Unlike traditional ETFs, crypto investments can experience dramatic price swings tied to Bitcoin's movements, and Bitcoin mining stocks like those held in WGMI often amplify those swings even further.

WGMI invests in companies that mine Bitcoin and has a beta hovering around 6, which means it's six times more volatile than the market. This ETF soared 84% over the past year, dramatically outpacing HODL due to its Bitcoin mining exposure. Mining companies don't just track Bitcoin's price; when Bitcoin rises, their profits can multiply faster since they're producing it. Plus, many top miners diversified into artificial intelligence services in 2025, creating additional revenue streams that boosted their stock prices even when Bitcoin struggled.

As its name indicates, HODL simply holds Bitcoin and tracks its price, offering $1.4 billion in assets with a 0.20% expense ratio. While more straightforward, HODL fell 15% over the past year as Bitcoin declined.

Risk-tolerant investors seeking amplified returns might consider WGMI, but just be aware of its extreme volatility and operational risks. Conservative investors wanting pure Bitcoin exposure without leverage should choose the pure-play HODL, understanding that both investments carry significant risk and neither guarantees returns in this nascent, volatile market.

Glossary

ETF (Exchange-traded fund): A fund holding a basket of assets, trading on an exchange like a stock.
Expense ratio: Annual fund fee, expressed as a percentage of assets, covering management and operating costs.
AUM (Assets under management): Total market value of all assets currently managed by a fund or investment firm.
Physically backed: Fund structure where the ETF actually holds the underlying asset, not just derivatives or futures contracts.
Beta: Measure of an investment’s volatility relative to a benchmark index, typically the S&P 500.
Max drawdown: Largest peak-to-trough decline in an investment’s value over a specified period.
Total return: Overall investment gain or loss, including price changes plus any income or distributions.
Single-asset fund: An ETF or fund that invests in only one underlying asset or security.
Diversification: Spreading investments across multiple assets to reduce the impact of any single holding’s performance.
Leverage: Use of borrowed money or financial instruments to amplify potential returns, which also increases risk.
Derivatives: Financial contracts whose value is based on an underlying asset, index, or rate.
Track record: Historical performance period showing how a fund or strategy has performed over time.

Sara Appino has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.