Bitcoin ETF Academy: Understanding WGMI vs HODL's Divergent Crypto Strategies

For those new to crypto investing, choosing between HODL and WGMI represents a fundamental learning moment—both funds offer exposure to Bitcoin’s ecosystem, yet through distinctly different paths. This academy guide breaks down how these two ETFs diverge in structure, cost, performance, and risk, helping you understand which aligns with your investment temperament and goals.

Performance Gap: Why WGMI’s crypto Mining Approach Drastically Outpaced HODL

The numbers tell a striking story. Over the trailing 12 months ending February 4, 2026, WGMI surged 84% while HODL declined approximately 24.7%—a performance gap of roughly 109 percentage points. This isn’t coincidental; it reveals how dramatically different exposure mechanisms can produce wildly different results in the crypto space.

HODL, issued by VanEck, directly holds physical Bitcoin. It’s the straightforward crypto play: when Bitcoin’s price rises, HODL rises; when Bitcoin falls, so does HODL. With Bitcoin trading around $76,300 as of early February 2026, HODL’s year-over-year decline mirrors Bitcoin’s own pullback, which has struggled despite broader market volatility.

WGMI, by contrast, doesn’t hold Bitcoin itself. Instead, CoinShares structures this fund to invest in companies generating revenue from Bitcoin mining and related infrastructure services. This means exposure to firms like Cipher Mining, Hut 8, and IREN—companies that profit not just from Bitcoin’s price appreciation, but from the operational business of mining it. When Bitcoin rises, these miners’ revenues can multiply faster than Bitcoin’s price gain alone would suggest. For example, in 2025, several top mining companies diversified into artificial intelligence services, creating entirely new revenue streams that boosted shareholder returns independent of Bitcoin’s price action.

This distinction explains the 84% return: mining stocks amplify Bitcoin’s upside because they’re producing the asset, capturing economics that go beyond simple price appreciation. WGMI’s beta of 6.01 means it’s roughly six times more volatile than the broader market, translating that mining leverage into both outsized gains and outsized drawdowns.

Portfolio Architecture: Direct Bitcoin Exposure Versus Mining Ecosystem Plays

Understanding what each fund holds is central to your investment decision. HODL is a single-asset fund—100% physically backed by Bitcoin. There’s no diversification into companies, no sector weighting, just pure Bitcoin. This structure makes it a pure-play crypto instrument; your return is entirely dependent on Bitcoin’s price movement.

WGMI holds a basket of 24 companies, with 81% allocated to the financial services sector and 18% to technology. Its largest positions include mining operators and infrastructure providers, firms whose business models are tightly intertwined with the Bitcoin network’s security and expansion. The fund does not invest directly in Bitcoin; instead, it captures the value chain surrounding cryptocurrency infrastructure.

This portfolio distinction has profound implications. HODL offers simplicity and direct correlation to Bitcoin; WGMI offers diversification across mining operators and service providers, which can dampen losses during crypto downturns but also amplify gains when the ecosystem thrives.

Cost Structure and Asset Base: Weighing Fee Burden

HODL’s 0.20% expense ratio is considerably cheaper than WGMI’s 0.75% fee—a meaningful 55-basis-point difference that compounds over decades. For long-term crypto academy learners focused on minimal drag, this advantage matters substantially.

HODL also commands significantly larger assets under management: $1.4 billion versus WGMI’s $355.7 million. Larger AUM often correlates with better liquidity, tighter bid-ask spreads, and greater fund stability.

However, WGMI’s higher fee doesn’t preclude it as a crypto investment vehicle—the 84% annual return far outpaced the fee drag. Yet if WGMI’s returns normalize, that 55-basis-point difference becomes more consequential.

Risk and Volatility: Choosing Your Crypto Investment Profile

This is where crypto academy fundamentals matter most: understanding your risk tolerance. Both funds carry extreme volatility compared to traditional equity ETFs, but they operate at different intensity levels.

HODL is the more conservative choice within the crypto realm. Its beta isn’t reported separately because it’s essentially Bitcoin’s beta—extremely volatile, but not amplified through operational leverage. It tracks Bitcoin’s price directly, so downside risk is bounded by Bitcoin’s own price movements.

WGMI’s 6.01 beta signals a different beast entirely. Mining stocks amplify price swings because their profitability is leveraged to Bitcoin’s success. A 20% decline in Bitcoin could trigger a 60%+ decline in mining stocks, as operational margins compress and investor risk appetite evaporates. Conversely, a 20% Bitcoin rally could drive 120%+ gains in mining equities.

For crypto academy investors beginning their journey, the decision hinges on risk tolerance:

• Risk-tolerant, seeking amplified returns? WGMI offers leveraged exposure to Bitcoin’s upside through mining operators, though you must stomach its extreme swings and operational risks (mining hardware costs, electricity expenses, regulatory shifts).

• Seeking pure Bitcoin exposure without amplification? HODL provides direct tracking with lower fees, though you accept Bitcoin’s native volatility and HODL’s recent -24.7% year-to-date decline.

Neither fund uses leverage, derivatives, or other structural amplifiers—the volatility difference stems purely from the underlying holdings’ business models.

The Bottom Line for Crypto Investors

HODL and WGMI represent two distinct paths through the cryptocurrency landscape. HODL is direct, simple, and cost-efficient, but offers zero upside amplification. WGMI captures mining economics and infrastructure expansion, driving 84% annual returns but at triple the volatility and with a 55-basis-point fee premium.

For crypto academy learners, the choice depends on whether you’re seeking pure Bitcoin exposure (HODL) or leveraged mining ecosystem exposure (WGMI). Both carry significant risk in this emerging, volatile asset class. Neither guarantees returns. Yet by understanding their structural differences—cost, composition, volatility, and risk profiles—you’re equipped to make an informed decision aligned with your investment goals and temperament.

Before investing in either fund, ensure you’ve researched Bitcoin’s broader macroeconomic drivers and your own financial situation. Crypto investing demands informed decision-making, and this comparison serves as your academy foundation.