Digital asset miners are integral to the digital asset economy and represent the largest—and a fast-growing—segment of the publicly traded digital asset ecosystem.
VanEck today announced the launch of the VanEck Digital Assets Mining ETF (DAM), expanding the firm’s crypto and blockchain-focused investment offerings and providing investors access to companies essential to driving digital transformation.
DAM offers targeted exposure to digital assets mining companies, which validate and process blockchain transactions to create new units of cryptocurrency.
“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,” said Ed Lopez, Head of Product Management at VanEck. “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 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 (MVISDAM). To be eligible for inclusion in the Index, a company must generate at least 50% of its revenues 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. The Fund will not invest in digital assets (including cryptocurrencies) directly or indirectly through the use of digital asset derivatives.
VanEck is a clear leader in the digital assets space, both in terms of the investment solutions it has pioneered and the research it regularly shares with the marketplace. The firm recognized in 2017 that digital assets could provide a store of value alternative to existing currencies and gold, as well as technology solutions that may lower costs in the payments and financial investing industries.
DAM joins a VanEck digital assets-focused ETF lineup that also includes the VanEck Digital Transformation ETF (DAPP), which offers diversified exposure to companies at the forefront of the digital assets transformation, such as digital asset exchanges, miners, and other key infrastructure companies; and the VanEck Bitcoin Strategy ETF (XBTF), the lowest-cost Bitcoin-linked ETF1 on the U.S. market, providing actively managed exposure to Bitcoin futures.
DAM is listed on the NASDAQ and has a net expense ratio of 0.50%.
About VanEck
VanEck has a history of looking beyond the financial markets to identify trends that are likely to create impactful investment opportunities. We were one of the first U.S. asset managers to offer investors access to international markets. This set the tone for the firm’s drive to identify asset classes and trends – including gold investing in 1968, emerging markets in 1993, and exchange traded funds in 2006 – that subsequently shaped the investment management industry.
Today, VanEck offers active and passive strategies with compelling exposures supported by well-designed investment processes. As of January 31, 2022, VanEck managed approximately $78.6 billion in assets, including mutual funds, ETFs and institutional accounts. The firm’s capabilities range from core investment opportunities to more specialized exposures to enhance portfolio diversification. Our actively managed strategies are fueled by in-depth, bottom-up research and security selection from portfolio managers with direct experience in the sectors and regions in which they invest. Investability, liquidity, diversity, and transparency are key to the experienced decision-making around market and index selection underlying VanEck’s passive strategies.
Since our founding in 1955, putting our clients’ interests first, in all market environments, has been at the heart of the firm’s mission.
Important Disclosures
1Based on total fund operating expenses vs. Bitcoin-linked competitors as of 11/12/2021.
The Fund will not invest in digital assets (including cryptocurrencies) (i) directly or (ii) indirectly through the use of digital asset derivatives. The Fund also will not invest in initial coin offerings. Therefore the Fund is not expected to track the price movement of any digital asset.
Investors in the Fund should be willing to accept a high degree of volatility in the price of the Fund’s Shares and the possibility of significant losses. An investment in the Fund involves a substantial degree of risk. An investment in the Fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Therefore, you should consider carefully the following risks before investing in the Fund, each of which could significantly and adversely affect the value of an investment in the Fund.
An investment in the VanEck Digital Assets Mining ETF (DAM) may be subject to risks which include, among others, risks related to investing in digital asset miners, investing in equity securities, Canadian issuers, small- and medium-capitalization companies, information technology and financials sectors, foreign securities, depository receipts, market, operational, index tracking, authorized participant concentration, new fund, absence of prior active market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, non-diversified and concentration risks which may make these investments volatile in price or difficult to trade. Small- and medium-capitalization companies may be subject to elevated risks.
Digital asset miners and other hardware necessary for digital asset mining are subject to the risk of malfunction, technological obsolescence, the global supply chain issues and difficulty and cost in obtaining new hardware. Malfunctions and normal wear and tear will, at any point in time, cause a certain number of digital asset miners to be taken off-line for maintenance or repair. Any major digital asset miner malfunction could cause significant economic damage. The physical degradation of miners will require replacement of miners. Additionally, as technology evolves, there may be a need to acquire newer models of miners to remain competitive, which can be costly and may be in short supply. Given the long production period to manufacture and assemble digital asset miners and the current global semiconductor chip shortage, there can be no assurance that miners can acquire or maintain enough digital asset mining computers or replace parts on a cost-effective basis for efficient and profitable digital asset mining operations.
An investment in the VanEck Digital Transformation ETF (DAPP)may be subject to risks which include, among others, risks related to investing in digital transformation companies, investing in equity securities, Canadian issuers, small- and medium-capitalization companies, information technology and financials sectors, foreign securities, market, operational, index tracking, authorized participant concentration, new fund, absence of prior active market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, non-diversified and concentration risks which may make these investments volatile in price or difficult to trade. Small- and medium-capitalization companies may be subject to elevated risks.
The technology relating to digital assets, including blockchain, is new and developing and the risks associated with digital assets may not fully emerge until the technology is widely used. Digital asset technologies are used by companies to optimize their business practices, whether by using the technology within their business or operating business lines involved in the operation of the technology. The cryptographic keys necessary to transact a digital asset may be subject to theft, loss, or destruction, which could adversely affect a company’s business or operations if it were dependent on the digital asset. There may be risks posed by the lack of regulation for digital assets and any future regulatory developments could affect the viability and expansion of the use of digital assets.
An investment in the VanEck Bitcoin Strategy ETF (XBTF) may be subject to risks which include, among others market and volatility, investment, futures contract, derivatives, investments related to bitcoin and bitcoin futures, derivatives, counterparty, investment capacity, target exposure and rebalancing, borrowing and leverage, indirect investment, credit, interest rate, illiquidity, investing in other investment companies, management, new fund, non-diversified, operational, portfolio turnover, regulatory, repurchase agreements, tax, of cash transactions, authorized participant concentration, no guarantee of active trading market, trading issues, fund shares trading, premium/discount and liquidity of fund shares, U.S. government securities, debt securities, municipal securities, money market funds, securitized/asset-backed securities, and sovereign bond risks, all of which could significantly and adversely affect the value of an investment in the Fund.
MVIS is the index business of VanEck, a U.S. based investment management firm and provider of VanEck ETFs. An index's performance is not illustrative of a fund's performance. Indices are not securities in which investments can be made.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of a Fund carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
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