VanEck is joining a growing thematic segment following cryptocurrency mining companies with its latest ETF.
The VanEck Digital Assets Mining ETF (DAM) debuted on the Nasdaq Wednesday with an expense ratio of 0.50%.
DAM follows an index built by its subsidiary MVIS tracking 25 companies around the world that derive at least half of their revenue from bitcoin mining and other forms of validation for cryptocurrency transactions. The index rebalances and reconstitutes quarterly.
VanEck’s newest offering is the third ETF on the U.S. market specifically focusing on following crypto miners behind the Viridi Cleaner Energy Crypto-Mining & Semiconductor ETF (RIGZ) and the Valkyrie Bitcoin Miners ETF (WGMI), but comes at a 25 and 40 basis point discount in part because it is the first index-based fund in the segment.
It’s also entering a somewhat crowded space of more than five other thematic ETFs focused on equities linked to the proliferation of digital assets, including the VanEck Digital Transformation ETF (DAPP). The two funds are highly correlated, with 95.7% of DAM’s weight invested in companies that are also tracked by DAPP’s index.
VanEck product manager JP Lee said via email that DAM leans toward smaller cap companies in their early stages and expects the funds to differentiate as the crypto mining sub segment grows within the larger digital assets industry.
“Over time, we expect the miners to grow in valuation and number, which should lead to further differentiation between the two ETFs,” he said.