VanEck‘s Digital Assets Mining ETF (DAM) debuted on Wednesday, providing investors with tailored exposure to companies involved in the crypto asset mining industry.
The exchange-traded fund will continue investing 80% of its total assets in stocks of crypto miners who earn at least 50% of their revenue from mining activities or related technology or have the capacity to do so. The fund will be based on the MVIS Digital Assets Mining Index and will have a 0.5 percent net cost ratio.
“Blockchains bring clarity, productivity, and lower costs to traditional centralized databases and procedures, but blockchain transactions can’t be validated or audited without miners, therefore their function is critical,” says the author. Ed Lopez, VanEck’s Head of Product Management
The ETF comes barely a month after asset management Valkyrie introduced its Bitcoin Miners ETF (WGMI), which focuses on miners who use renewable energy as their primary source of power. Since its debut on Feb. 8, the fund has lost more than 10%, largely in line with drops in other miners and the price of bitcoin (BTC).
According to Lopez, now is a “compelling time” for VanEck to start the fund because the crypto mining industry is still in its early phases of development, and he anticipates strong demand from investors for all forms of digital commodities.
Miners, mining manufacturing firms, aspiring mining manufacturers, and a blockchain-focused bank are among the fund’s top holdings.
Riot Blockchain (RIOT) has the highest weighted (about 11%), followed by Hut 8 Mining (HUT) at 9.1%, Marathon Digital (MARA) at 8.3%, Iris Energy (IREN) at 7%, and Canaan (CAN) at 6.5 percent. Hive Blockchain (HIVE) is ranked 6.3 percent, Northern Data (NB2.GR) is ranked 5.8 percent, Block (SQ) is ranked 5.7 percent, Bitfarms (BITF) is ranked 5.6 percent, and lender Silvergate Capital (SI) is ranked 4.8 percent.
VanEck also offers a futures-based bitcoin ETF, the Bitcoin Strategy ETF (XBTF), and a Digital Transformation ETF, both of which were introduced in mid-November (DAPP). The Securities and Exchange Commission rejected the company’s spot bitcoin ETF, which was one of numerous.
Also Read: South Korea’s Largest Financial Conglomerate is Considering Cryptocurrency Exchange-Traded funds (ETFs)
About VanEck
VanEck was one of the first asset managers in the United States to provide investors with access to overseas markets. This set the tone for the firm’s efforts to identify asset classes and trends that would later affect the investment management business, such as gold investing in 1968, emerging markets in 1993, and Exchange Traded Funds in 2006.
VanEck now provides active and passive investment solutions with attractive exposures and well-designed investment processes. The firm’s capabilities include anything from basic investing options to more specialized exposures that help diversify portfolios.
In-depth, bottom-up research and security selection by portfolio managers with firsthand knowledge in the sectors and areas in which they invest fuel our actively managed strategies. The expert decision-making around market and index selection that underpins VanEck’s passive strategies is based on liquidity, diversity, and transparency.
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