Valkyrie bitcoin mining ETF to list on Nasdaq; all you need to know

Historically, only futures ETFs (an agreement to buy or sell shares of an ETF at an agreed-upon price in the future) have been allowed in the market as spot ETFs have not been approved by the SEC. This is a small but important step towards future institutional adoption of bitcoin and other cryptocurrencies.

This will also spotlight bitcoin cryptocurrency mining companies that have been slowly becoming more popular as the demand for crypto trading has also been increasing amongst the general public.

This could also be a floodgate for other spots ETFs. Valkyrie also has a smattering of spots ETFs waiting for approval from the SEC.

This ETF offers exposure to stocks of various bitcoin mining companies already listed on the Nasdaq but with benefits of ETF investing.

The ETF will be listed on the Nasdaq exchange under the 'WGMI' ticker.

The fund will have 80 percent exposure to mining companies that derive at least 50 percent of their profits from either bitcoin mining or related activities.

The balance portion of the ETF will be directed towards companies with substantial cryptocurrency holding in their balance sheets.

The ETFs expense ratio will be 0.75 percent, which means that for every $100 of the ETF securities bought by traders, 75 cents will go to Valkyrie, per a Coindesk report.

Some of the biggest mining company securities in the fund will be Argo Blockchain (ARBK), Bitfarms (BITF), Cleanspark (CLSK), Hive Blockchain (HIVE) and Stronghold Digital Mining (SDIG). Their allocation within the fund will range from 8 to 10 percent.

Valkyrie has also stated that the mining operations in the fund's portfolio utilise around 77 percent renewable energy to alleviate investors’ concerns about mining's environmental impact.

Viridi Cleaner Energy Crypto-Mining & Semiconductor ETF (RIGZ), and the Bitwise Crypto Industry Innovators ETF (BITQ) are among other US-listed ETFs that have exposure to crypto mining companies. The steep decline in bitcoin prices in recent weeks had weighed on the performance of these ETFs. However, with bitcoin now rising back above $44,000, the ETFs are gathering steam.

Bitcoin mining has been a hot-button issue for lawmakers and individuals concerned about the carbon footprint the activity leaves. To their credit, bitcoin mining companies have been slowly transitioning to the use of renewable sources of energy. A recent report from the Bitcoin Mining Council (BMC) showed that bitcoin mining is steadily adopting a sustainable model for power usage.

Founder and CEO of MicroStrategy, Michael Saylor, a key member of the BMC, said, "This quarter we saw the trend continue with dramatic improvements to Bitcoin mining energy efficiency & sustainability due to advances in semiconductor technology, the rapid expansion of North American mining, the China Exodus, and worldwide rotation toward sustainable energy and modern mining techniques.”