Delayed Ethereum Merger Proves Costly
Fallout continued from Ethereum’s delayed transition from proof of work to proof of stake. We take a closer look at the impact, and discuss the prospects of widening adoption of NFT technology.
Read BlogISIN: DE000A3GWEU3
Risk of a Crypto Leaders ETN: You may lose money up to the total loss of your investment due to the extreme volatility of this asset class and the Main Risk Factors of a Crypto Leaders ETN described below and additional risks described in the sales prospectus.
VanEck Crypto Leaders ETN strategy is a diversified basket of crypto assets providing exposure to some of the most liquid digital assets amongst the top 10 cryptocurrencies weighted by market capitalization in accordance with the custodian specifications applicable and the approvals by the relevant stock exchanges.
The strategy of Crypto Leaders ETN allows investors easy and diversified access to a range of crypto use cases – from inflation hedge to smart contracts to Web3.
Risk of extreme volatility
Risk of extreme volatility
Bitcoin long held a majority share of the entire crypto market capitalization. Despite the aggressive rise of Ethereum and other smart contract platforms, bitcoin still remains the largest digital asset. However, over time, Bitcoin’s trend of losing market share has shown the need for diversification away from the largest digital asset.
Bitcoin's market cap has fallen over time as new coins have gained market share
Source: CoinMarketCap. Data as of 15 July 2022.
As the digital asset industry matured, altcoins decoupled from bitcoin and drove significant small-cap out-performance. Bitcoin has underperformed the Crypto Leaders Index by 244 percentage points and over performed the small-cap index by 572 percentage points since the start of 2021 as illustrated by the below.
Source: VanEck, MVIS. 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.
ISIN: DE000A3GWEU3
Lower risk: Typically lower reward
Higher risk: Typically higher reward
Despite all the hype, digital assets are a highly risky investment. Below are key risk factors that need to be considered before making an investment in Crypto Leaders ETN.
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 crypto assets may be subject to hacking and could result in loss of crypto assets.
For more information on risks, please see the “Risk Factors” section of the relevant ETN’s prospectus, available on www.vaneck.com.
Fallout continued from Ethereum’s delayed transition from proof of work to proof of stake. We take a closer look at the impact, and discuss the prospects of widening adoption of NFT technology.
Read Blog