How can you invest in digital finance? For example via a portfolio of leading smart contract platforms that are vying to automate traditional finance, cutting out the middle man. Our VanEck Smart Contracts Leaders ETN offers a straightforward way to invest in the broad theme, removing the risk of backing just a single platform1.
The ETN backs a range of platforms, going beyond the traditional leader Ethereum (see below, including back tested investment performance since 2019)
Source: VanEck, MarketVector. The performance quoted represents past performance which is not a reliable indicator of future results. Future performance may be lower or higher than current performance. Investment returns will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original cost. An index’s performance is not illustrative of the ETN’s performance. Investors cannot invest directly in the Index. Indices are not securities in which investments can be made.
Blockchain technology makes it possible to cut out the middle men of finance – banks, mortgage brokers and insurers – through so-called smart contracts. While it’s still early days, digital finance (also called decentralized) is growing fast. Yet smart contract platforms are still competing to be tomorrow’s winners, which is why our ETN invests in a dynamic basket of leaders.
The VanEck Smart Contract Leaders ETN tracks the prices of the leading platforms’ underlying cryptocurrencies. It currently has the following holdings:
Dynamic selection process, based on market capitalization, liquidity and availability (at our custody partner, market makers and exchanges).
Dynamic quarterly rebalancing to focus on the winners at all times.
All the assets must be listed on at least one of the top 15 exchanges, ranked by Crypto Compare's Exchange Benchmark.
Lower risk: Typically lower reward
Higher risk: Typically higher reward
The trading prices of many digital assets have experienced extreme volatility in recent periods and may well continue to do so. Digital assets were only introduced within the past decade and regulatory clarity remains elusive in many jurisdictions. Digital assets' value depends on such regulation remaining favorable, as well with the technological capabilities, the development of protocol networks, competition from other digital asset networks and from forks. Volatility can be strongly amplified by transactions from speculative investors, hedge funds and other large investors. You may experience losses if you need to sell your Shares at a time when the price of the underlying digital asset is lower than it was when you made your prior investment. Even if you are able to hold Shares for the long-term, your Shares may never generate a profit.
If the currency of the Product differs from the currency you invest in, your final return depends on the exchange rate between your investment currency and the currency of the Product.
Trading venues and systems used by market participants to trade Index Components may be subject to hacking and could result in loss of Index Components.
Investors can lose all invested capital. The Product does not include capital protection against market risk. At the end of the term the issuer may not be able to pay the final redemption amount.
For more information on risks, please see the “Risk Factors” section of the relevant ETN’s prospectus, available on www.vaneck.com.