VanEck Launches Crypto Mining ETF

VanEck’s Digital Assets Mining ETF (DAM) opened for business Wednesday, offering targeted exposure to those companies in the crypto asset mining industry.

The exchange-traded fund will invest at least 80% of its total assets in securities of crypto miners that generate or have the potential to earn at least 50% of their revenue from mining activities or related technologies. The fund will track the MVIS Digital Assets Mining Index and will a have net expense ratio of 0.5%

“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,” VanEck Head of Product Management Ed Lopez said in a statement on Wednesday.

The ETF launch comes just a month after asset manager Valkyrie launched its Bitcoin Miners ETF (WGMI), focusing on miners that primarily rely on renewable energy. That fund fell more than 10% since its inception on Feb. 8, roughly in line with declines in other miners and the price of bitcoin (BTC).

It’s a “compelling time” for VanEck to launch the fund, said Lopez, as the crypto mining sector is still in the early stages of growth, and he expects high levels of demand from investors for all types of digital assets.
The top holdings of the fund include miners, mining manufacturing companies, aspiring mining manufacturers and a blockchain-focused bank.

The largest weighting is Riot Blockchain (RIOT) at 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%. Rounding out the top 10 holdings are Hive Blockchain (HIVE) at 6.3%, Northern Data (NB2.GR) at 5.8%, Block (SQ) at 5.7%, Bitfarms (BITF) at 5.6%, and lender Silvergate Capital (SI) at 4.8%.

VanEck also has a futures-based bitcoin ETF product it launched in mid-November, the Bitcoin Strategy ETF (XBTF), as well as its Digital Transformation ETF (DAPP). The company’s spot bitcoin ETF was one of several rejected by the Securities and Exchange Commission.