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 invest at least 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 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,”
So, VanEck Head of Product Management Ed Lopez explains in a statement on Wednesday.
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%. Which is, 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. Then, and he expects strong demand from investors for all forms of digital assets.
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%. Then, 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. Then, and lender Silvergate Capital (SI) is ranked 4.8 percent.
VanEck also offers a futures-based bitcoin ETF, the Bitcoin Strategy ETF (XBTF). Then, 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 several.
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