VanEck to join cryptocurrency mining industry via new ETF

Global investment manager VanEck has applied to establish an ETF that will track the price and yield performance of the Global Digital Asset Mining index.

VanEck filed for digital assets mining ETF

VanEck has more than $60 billion in assets under management. Accordingly, the Global Digital Asset Mining index is being used to track the performance of companies that are somehow involved in digital asset mining activities, including Bitcoin or altcoin mining. In addition, companies that provide various services such as software development and hardware providers also fall under the category of mining operations providers.

The fund will invest at least 80% of its total assets in securities in the DAMC, but at the same time, VanEck is not allowed to invest in digital assets using derivative products such as options or futures. Therefore, the fund will not track the price movement of any cryptocurrency.

The VanEck ETF will provide exposure to companies that are physically active with digital assets or hold them on their balance sheets and are also represented in the Global Digital Assets Mining index.

In addition, there are risks behind the digital asset mining industry, such as technological obsolescence, supply chain issues, and specific problems with acquiring new hardware. In addition, the fund agrees that most digital asset miners are facing the problem of depending on third-party companies based and operating abroad.

While most cryptocurrency miners still reap high profits from their operations, the rapid change in assets such as Bitcoin can lead to additional losses for those companies and, as a result. Therefore, investors who have direct contact with the index as mentioned above will suffer.

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