VanEck on Wednesday launched a new ETF offering targeted exposure to digital assets mining companies, which validate and process blockchain transactions to create new units of cryptocurrency.
The VanEck Digital Assets Mining ETF (DAM) expands the firm’s crypto and blockchain-focused investment offerings and provides investors access to companies essential to driving digital transformation.
“Mining is critical to the growth and functioning of digital assets. Miners secure, record and store data on the blockchain and are currently the largest segment of the publicly traded digital asset ecosystem,” Ed Lopez, head of product management at VanEck, said in a statement. “Though fast-growing, many of the leaders in the digital asset mining category remain in the early stages of their growth. That factor, combined with sustained, high current levels of demand for all types of digital assets, make this a compelling time for us to be launching DAM to focus specifically on digital assets miners.”
Digital assets applications, technology, and use cases have exploded in recent years, supported by both retail and institutional participants. Digital assets miners have emerged as a crucial part of this burgeoning ecosystem and play a critical role in the validating and processing of blockchain transactions. Miners now represent the largest group of companies within the broader digital assets ecosystem, and have seen their valuations grow significantly in recent years, according to John Patrick Lee, product manager at VanEck.
Digital assets mining companies use specialized computer chips in conjunction with software to solve complex math problems. In so doing, transactions that exist on current blocks can be verified and the miners themselves are rewarded with newly issued cryptocurrency.
“Blockchains introduce transparency, efficiency and lower costs compared to traditional centralized databases and processes, but without miners, blockchain transactions cannot be verified and audited, making their role absolutely essential,” added Lopez.
DAM seeks to track as closely as possible the price and yield of the MVIS Digital Assets Mining Index. To be eligible for inclusion in the index, a company must generate at least 50% of its revenue from digital assets mining activities or mining-related technology or have projects that, when developed, have the potential to generate at least 50% of their revenues from digital asset mining activities or mining-related technologies, according to regulatory filings.
DAM is listed on the NASDAQ and has a net expense ratio of 0.50%.
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