Summary The VanEck Digital Transformation ETF offers tactical exposure to the blockchain sector, with a strong correlation to Bitcoin price movements. DAPP's top holdings are heavily dependent on Bitcoin and Ethereum prices, despite the ETF's stated goal of tracking broader blockchain equities. Net inflows and stablecoin market cap growth signal renewed investor confidence and increasing fiat entry into the crypto ecosystem. I recommend a tactical buy for DAPP, with careful timing, profit-taking, and a portfolio allocation not exceeding 5% due to high volatility. Investment Thesis DAPP is an ETF that focuses on the blockchain sector, but despite this not being intentional, it has maintained a close relationship with Bitcoin thus far. However, although it may be a good option for the long term, this sector is highly volatile and subject to significant drawdowns, so entries should be tactical, with careful timing, taking profits, and potentially re-entering if conditions improve. Currently, we recommend initiating a position based on signs of bottom/base consolidation and a still-supportive macro backdrop. ETF Overview The VanEck Digital Transformation ETF ( DAPP ) is a way to gain exposure to the crypto ecosystem without investing directly ( or indirectly ) in digital currencies. Its objective is to track the MVIS Global Digital Assets Equity Index (MV DAPP TR) (Total Return, i.e., price appreciation plus dividends) before fees and expenses. To do this, it invests in listed companies whose business model is closely related to the blockchain and crypto ecosystem, and, as reflected in the fact sheet, the fund is not expected to track the price movement of any crypto asset. Fund Web Although it distributes dividends (annually), DAPP is an ETF designed to generate returns primarily through price appreciation (price return), with annual distributions. Finally, DAPP currently has a Total Expense Ratio of 0.51% and a YTD return of 13.24% to date. Holdings According to its documentation, the fund performs quarterly rebalancing and must have at least 20 different holdings in its portfolio. DAPP Holdings (Fund Web) To better understand what the ETF invests in, let's summarize the activity and business of the top ten positions that represent more than 60% of the total weight: Block Inc. (XYZ US) : Fintech for payments and financial services. Its crypto arm is Cash App, through which users can buy/sell crypto assets and make Bitcoin payments via the Lightning Network, although it also offers access to Bitcoin L1 for transfers between wallets. Coinbase Global (COIN US) : It is the (centralized) bridge between the traditional system and the blockchain world. Its main business is exchange/brokerage, but its custody services are also important. It monetizes mainly through transaction fees and custody services, staking, etc. Strategy Inc. (MSTR US) : Already well known to everyone, it acts primarily as a Bitcoin Treasury Company. It is probably the asset that has the strongest correlation with the price of Bitcoin. Strategy Inc. also has its Power BI-type software business, but it is becoming increasingly less relevant. IREN Ltd. (IREN US) : Infrastructure (data centers) for Bitcoin mining. They are also developing the AI/HPC side of the business. Their revenue depends on mining pools and, secondarily, on the cloud rental side for AI/HPC. Therefore, to pay costs, they must sell Bitcoin to obtain cash, which means that a large share of their cash generation (and operating economics) is ultimately tied to BTC price. Hut 8 Corp. is a mixed model that combines revenue from its own mining operations and digital infrastructure leasing. Furthermore, compared to IREN, Hut 8 explicitly communicates a “Strategic Bitcoin Reserve” and “at-the-market (ATM) purchases” (e.g., $100 million purchase) as part of its capital strategy. In addition, it uses BTC in its financing strategy (“Digital assets – pledged as collateral”), a noteworthy development that underscores how Bitcoin is starting to be used as collateral in corporate operations. Metaplanet Inc.: Its relationship with the crypto world is through the business model of a Bitcoin treasury company: it accumulates BTC through financing. Similar case to Strategy Inc. Circle Internet Group Inc.: Issuer of USDC. Its business model is similar to that of Tether: it earns money from interest on reserves ( U.S. Treasury securities + U.S. Treasury repurchase agreements (repos) + cash ). It is mainly affected by the volume of activity and interest in using the crypto system, whether for investing, speculating, or transferring from the traditional system to the blockchain for other uses. Bitmine Immersion Technologies Inc.: Its business model is that of an Ethereum Treasury together with passive income from staking. Therefore, it maintains a close relationship with the price of Ethereum in order to monetize. Applied Digital Corp.: Similar to Hut 8, its model focuses on operating and building infrastructure for mining and AI/HPC. However, unlike Hut 8, it monetizes through infrastructure leasing, so its monetization is more closely linked to the growth of the crypto ecosystem (development of platforms, applications, infrastructure, increase in business volume, etc.) than to the price of an asset. Riot Platforms Inc.: A company currently focused solely on Bitcoin mining, with its primary cash generation coming from selling mined Bitcoin. It also has other sources of income: engineering and power credits. If you've made it this far, you'll have noticed that the top holdings profile somewhat contradicts the idea of not expecting the ETF to follow the price/movements of any crypto asset when several of its holdings have a revenue model that is closely dependent on the price of Bitcoin or Ethereum. DAPP vs BTC-USD (TradingView) If we compare Bitcoin’s price action with DAPP’s, we can clearly see the influence of Bitcoin movements on the valuation of the ETF. Given that Bitcoin acts as the main proxy for the crypto market (rule of thumb: if Bitcoin rises, the crypto market follows), and at the same time we can see how many of these holdings are closely dependent on its price, I believe it is prudent to monitor Bitcoin and the forces that may influence it as a factor in determining the direction of DAPP. From this perspective, we recently published an article on GBTC , analyzing the current situation of the asset. Despite the volatility derived from speculation in the derivatives markets, based on cohort analysis and selling pressure fatigue, the signal is that capitulation has ended and we are beginning to see the first green shoots of accumulation. However, the value of Bitcoin is not the only factor influencing DAPP, given that this fund is a bet on emerging companies in the sector and therefore its business models depend on macroeconomic conditions, financing, sector growth, adoption, integration of technology in the “real world,” as well as interest in it, regulatory advances, etc. That is why, to gain some perspective, we will use ETF flows as a proxy for investor demand and also assess the dollars entering the ecosystem. Cumulative ETF Flow (Artemis XYZ) ETFs Net Flow (Artemis XYZ) In the first image , we show cumulative net inflows, while in the second , net inflows. Both are weekly time series. While it is true that following the correction since the peak in September-October, cumulative net inflows have rebounded for several weeks, reinforcing the idea of those “green shoots” we mentioned earlier, in which we are beginning to see signs of growing strength in demand. Furthermore, it is noteworthy that in the second half of 2025 there has not been a single week of negative flows; all have been positive, even in the worst moments. Although there has been some profit-taking, this positive net flow reinforces the fact that most participants are buying with a long-term view, showing confidence in the asset. Total Stablecoin Market Cap (CoinGlass) In addition to this, with the Total Market Cap of Stablecoins , we can visualize the volume of fiat currencies that have entered the blockchain ecosystem. In 2024 alone, the volume grew from $123 billion to $188 billion (approximately 52%), and despite the fact that performance in 2025 has been worse, the volume has continued to grow at a similar rate, going from $188 billion to $268 billion. This represents an approximate growth of 42%, which, for the moment, with favorable news in terms of regulation and adoption, together with projects such as Cash App that are bringing utility to retail, adds factors in favor of the trend continuing to grow in 2026, remaining a strong driver for asset appreciation and increased use of blockchain services. Conclusion DAPP is a high-volatility ETF with deep/severe drawdowns, but it can offer attractive opportunities if entries are timed well. The blockchain industry is maturing, with more and more real services emerging and DeFi continuing to integrate into everyday life and traditional finance. DAPP is a bet on the evolution, revaluation, and continuity of this sector, but it is still very sensitive, so positioning/entries should be tactical and with a small portion of the portfolio (no more than 5%). Currently, I would recommend buying, given that we are in the final stages of bottoming out and are beginning to see positive patterns in demand. Similarly, it is a position in which I would take profits progressively and exit/close the position if macro signals confirm a regime shift that turns unfavorable for high-beta equities.
