VanEck has launched the VanEck Digital Assets Mining ETF (DAM), expanding the firm’s crypto and blockchain-focused investment offerings and designed to provide investors access to companies essential to driving digital transformation.
DAM is designed to offer 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,” says 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 specialised 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,” says 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 per cent 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 per cent 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. DAM is listed on the NASDAQ and has a net expense ratio of 0.50 per cent.
