Summary Bitwise Crypto Industry Innovators ETF offers high-beta, equity-based exposure to the crypto economy, focusing on miners, trading, and infrastructure. BITQ's holdings are predominantly mid-cap companies, with top names like IREN, MARA, and RIOT, many showing volatile earnings and high P/E ratios. The ETF is highly cyclical, with extreme drawdowns in risk-off years and outsized gains in risk-on periods, making it unsuitable for buy-and-hold strategies. BITQ is rated 'Buy' for momentum into year-end 2025, but investors should time entry and exit carefully due to its high volatility. Thesis Similar to gold miners rallying in 2025, bitcoin miners are having an astounding year as the currency rallies. Bitwise Crypto Industry Innovators ETF ( BITQ ) is an equities exchange-traded fund that provides focused exposure to the crypto economy without the complications of holding crypto assets outright. The ETF holds a mix of crypto miners, crypto trading platforms, asset management platforms, and infrastructure companies. The ETF is market weighted and contains 30 names. As per its fact sheet, most of its holdings are mid-cap companies, which make up 56% of the holdings. Large-caps are 25%, while mega-caps represent 16%. The article will explore some of the holdings in detail, and outline why this ETF is a good momentum play given its very high beta and cyclical nature. Composition - only equities, no outright cryptocurrencies The fund segregates its holdings in larger sub-sectors: Mining: 37% Trading & Custody: 35% Treasury Holdings: 15% Asset management: 7.5% Infrastructure: 5.5% Let us have a look at the top names in the ETF: Top 10 Holdings (Fund Website) The top ten names make up over 63% of the fund, and they represent well-known names in the space. Let us have a closer look at some of them: 1) IREN Ltd ( IREN ): IREN is an Australia-based company that owns and operates data centers powered by 100% renewable energy for high-performance computing (HPC) applications. The company has positive earnings, a forward EPS of 0.98, and a 61x P/E ratio. The name trades at 8x book value, but its forward earnings projections are muddled as per Seeking Alpha (i.e. does not show a clear upwards trajectory). As per Seeking Alpha, the average price target as per Wall St analysts is $48 per share. 2) MARA Holdings ( MARA ): Mara is an American digital asset technology and cryptocurrency mining company. The name has several business segments: bitcoin mining, digital asset treasury, and energy and infrastructure. In terms of bitcoin mining, MARA operates specialized computers to validate transactions on the Bitcoin blockchain and earn Bitcoin. Thus the higher the price of Bitcoin, the higher the NAV for Mara. The treasury side involves holding strategic Bitcoin reserves for long term gains. The company has positive earnings, a forward EPS of 0.48, and a 41x P/E ratio. The name trades at 1.5x book value, and its forward earnings projections are also muddled with negative EPS projected for the future. The average price target as per Wall St analysts is $23 per share. 3) Riot Platforms ( RIOT ): Riot is a publicly traded, vertically integrated Bitcoin mining company and infrastructure platform. The name operates several business segments, including Bitcoin mining, treasury services, and an AI computing platform. The company has negative earnings estimates for both 2025 and 2026, although it has posted quarters of positive earnings in the past. Its operating income until 2024 has always been negative. The company trades at 2.4x book value, and the average price target per Wall St analysts is $21 per share. 4) Bitdeer Technologies Group ( BTDR ): Although not in the top 10, the fund does hold a 2% allocation to BTDR. Bitdeer is a global technology company focused on providing a comprehensive suite of computing solutions for the blockchain and high-performance computing industries. BTDR operates several segments, such as bitcoin mining, cloud hash rate, and infrastructure. The company has negative earnings estimates for 2025, but a 0.91 EPS estimate for 2026. Furthermore, EPS is seen doubling in 2027. The name trades at 6x book value, and the average Wall St. estimate is $25/share. A very cyclical ETF Let us start by looking at some of the fund's analytics: AUM: $0.5 billion Expense ratio: 0.85% St deviation (3Y): 67% Beta: 2.08 As we can see this name is not for the faint of heart, with a 67% standard deviation, and a drawdown profile that looks like this: Drawdown profile (PortfolioVisualizer) Yes, you are reading the above chart correctly, where you see the ETF with a -90% drawdown in late 2022. It has not yet recovered its entire drawdown since inception, but the performance this year has been spectacular, with the fund up +71%. The performance per year is as follows as per Morningstar: 2022: -83% 2023: +246% 2024: +47% YTD: +71% We can see the pattern here, with risk-off years having massive drawdowns, while risk-on years see substantial gains. This ETF is not a buy and hold in our view, but a cyclical play after a recession. We can also compare the ETF versus the bitcoin performance for the respective years: 2022: -64% 2023: +156% 2024: +121% YTD: +31% When we compare the two sets of data, we can see BITQ is a high-beta play on bitcoin, with larger drawdowns but also much larger positive recoveries. A momentum play into the year end As we have articulated above, BITQ is not a buy and hold, but a cyclical momentum play. Crypto has been very attractive in 2025 given deficit concerns in the U.S. and the dollar depreciation. A strong bitcoin has percolated into the crypto universe, with ample moves for the miners and infrastructure companies. BITQ is exhibiting strong momentum as per Seeking Alpha, with an A+ momentum grade and a 'Strong Buy' quant rating. The current government shutdown has also put upward momentum on crypto, with investors moving to an asset class that is not affected by bipartisan politics. We are of the opinion that the crypto universe will continue to deliver for the rest of 2025, with strong momentum and a high beta. However be careful with BITQ by picking an entry and exit point. This is not an ETF you want to hold long term. Our opinion is around strong momentum into December; thus, the penciled exit point is at the end of 2025. Conclusion BITQ is an equities ETF. The fund aggregates crypto miners, crypto trading platforms and crypto infrastructure companies. Many underlying holdings have negative EPS and very high P/E ratios, but are set to grow if bitcoin prices remain high. The fund is a high beta play on crypto prices and exhibits a high cyclicality. We like this ETF as a momentum play into the year end, but be mindful because BITQ is not a buy and hold by any means.
