Blockchain ETF

Access to the growing and varied digital assets ecosystem

The blockchain ecosystem is expanding fast, bringing along an increasing number of use cases and applications. VanEck's Blockchain ETF (VanEck Crypto and Blockchain Innovators) seeks to capitalize on this compelling opportunity by offering a diversified and pure-play exposure.

VanEck Crypto and Blockchain Innovators

Access to the emerging blockchain ecosystem
Players at the forefront of its various sectors
Diversified and pure-play approach
Dynamic reviews to adapt to a rapidly changing environment

ETF Details

Basis-Ticker: DAPP
ISIN: IE00BMDKNW35

TER: 0.65%
AUM: $196.7 M (as of 04-11-2024)
SFDR Classification: Article 6

Lower risk

Typically lower reward

Higher risk

Typically higher reward

Risks of a Blockchain ETF: You may lose money up to the total loss of your investment due to the Main Risk Factors prospectus such as liquidity risk, limited diversification risk and risk of investing in smaller companies which are described below and in the sales prospectus.

The rising blockchain ecosystem

The emergence of blockchain technology has given rise to a thriving ecosystem, which spans across sectors and boasts an increasing number of use cases and possible applications. Blockchain technology refers to a distributed ledger where information is stored, which is decentralized in nature. Many listed companies are actively engaging in this innovative and disruptive environment. However, it should be noted that there are still many uncertainties around the blockchain technology, including regulatory ones.

Digital Assets Equities’ Properties

Investing in digital assets equities through VanEck's Blockchain ETF provides a unique opportunity to benefit from the potential growth of the digital assets market. These equities have demonstrated a low correlation with the overall stock market, but are highly correlated with the prices of cryptocurrencies. By adding these equities to a portfolio, investors can achieve greater diversification and exposure to the exciting blockchain industry. While it's worth noting that digital assets are considered highly speculative, the risks associated with investing in digital assets equities can be effectively managed by monitoring them closely. With careful consideration and due diligence, investing in digital assets equities through this Fund can offer significant potential for growth and diversification.

Contained correlation with the market
The index tracked by the VanEck Blockchain ETF presents a moderately low correlation with broad market indices like the Nasdaq or the S&P 500...

Contained correlation with the market

The index tracked by the VanEck Blockchain ETF presents a moderately low correlation with broad market indices like the Nasdaq or the S&P 500. On the other side it tends to move more similarly to the main cryptocurrencies.

Source: Morningstar, correlation 1/04/2021 – 31/01/2023
MVIS Global Digital Assets Equity Index	1
MVIS CryptoCompare Bitcoin Index	0.85	1
MVIS CryptoCompare Ethereum Index	0.78	0.79	1
MVIS CryptoCompare DA 100 Index	0.85	0.95	0.92	1
Nasdaq 100 Index	0.72	0.61	0.7	0.66	1
S&P 500 Index	0.6	0.55	0.67	0.61	0.95	1

A leveraged bet on digital assets
Investing in this Fund can provide investors with a unique opportunity to benefit from the potential growth of digital assets equities...

Blockchain ETF to take part in the digital assets economy

The Blockchain ETF aims to provide access to the nascent digital assets economy. In particular, it offers exposure to the following sub-sectors.

Miners
Crypto Exchanges
Payment Gateways

The VanEck Blockchain ETF brings together various key players in the exciting world of crypto mining. These companies use powerful hardware and advanced computational power to participate in the mining process, which involves solving complex algorithms to validate transactions for cryptocurrencies like Bitcoin. Although this process can be energy-intensive, the rewards can be significant as miners earn a certain amount of cryptocurrencies. It's worth noting that the profitability of this business depends on multiple factors, including energy prices and cryptocurrency valuations. Excitingly, the Fund includes some of the most prominent miners in the game, such as Riot Platforms Inc, Hut 8 Mining Corp, and Bitfarms Ltd.

Similar to traditional stock exchanges, crypto exchanges provide a platform for buyers and sellers of digital assets to come together and exchange their assets. These exchanges not only act as market makers but also offer a range of additional services to their clients, including custody of assets and advanced trading features. The VanEck Blockchain ETF includes some of the most reputable crypto exchanges in the market, such as Coinbase, which is a prime example. Coinbase offers its users a secure and user-friendly platform, making it easy for anyone to participate in the exciting world of cryptocurrencies.

The Fund includes a diverse range of companies, including payment gateway companies. These firms specialize in processing payments made through credit cards and digital assets, both for online platforms and brick-and-mortar stores. This means they play a crucial role in facilitating transactions and making it easy for people to use digital assets in their everyday lives. Block Inc is one such payment gateway company included in the ETF.

The Blockchain ETF by VanEck can also include other companies involved in:

Hardware for example necessary to mine or store cryptocurrencies
Firms who purchased large amounts of cryptocurrencies and hold them on their balance sheets
Companies who develop software and value added services to facilitate digital assets transactions, payments and the operation of digital asset applications

Key Documents and Links

Fact sheet

KID

Prospectus

Fund page

Main Risk Factors of a Blockchain ETF

Liquidity Risks
Limited Diversification Risk
Risk of Investing in Smaller Companies

Exists when a particular financial instrument is difficult to purchase or sell. If the relevant market is illiquid, it may not be possible to initiate a transaction or liquidate a position at an advantageous or reasonable price, or at all.

The Fund may invest a relatively high percentage of its assets in a smaller number of issuers or may invest a larger proportion of its assets in a single issuer. As a result, the gains and losses on a single investment may have a greater impact on the Fund's Net Asset Value and may make the Fund more volatile than more diversified funds.

The securities of smaller companies may be more volatile and less liquid than the securities of large companies. Smaller companies, when compared with larger companies, may have a shorter history of operations, fewer financial resources, less competitive strength, may have a less diversified product line, may be more susceptible to market pressure and may have a smaller market for their securities. This a further risk factor to consider when making an investment in the ETF.

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