New York-based asset management firm VanEck has recently taken a significant step towards launching a spot Bitcoin exchange-traded fund (ETF). In an effort to differentiate themselves from other applicants seeking approval for spot ETFs, VanEck has chosen to submit amended filings related to its fund seeding. This distinctive approach showcases VanEck’s unique strategy and commitment to offering innovative solutions in the spot Bitcoin ETF arena.
Previously, VanEck’s proposal to list and trade shares of the VanEck Bitcoin Trust had been rejected by the United States Securities and Exchange Commission (SEC) multiple times. This rejection aligns with the SEC’s trend of consistently denying various ETFs designed to track digital assets, citing concerns regarding potential market manipulation within the underlying digital asset market. Despite these challenges, VanEck remains resilient in its pursuit of bringing a spot Bitcoin ETF to the market.
Fund Seeding and Methodology
One notable aspect of VanEck’s amended filing is the method of fund seeding. Unlike other spot Bitcoin ETF proposals that rely on a cash-based seeding approach, VanEck’s Bitcoin ETF will use Bitcoin itself for fund seeding. This decision sets them apart from the competition and showcases their confidence in utilizing Bitcoin as a reliable asset for the ETF.
The VanEck Bitcoin Trust is designed as an exchange-traded fund (ETF) that issues common shares of beneficial interest trading on the Cboe BZX Exchange. The primary objective of the trust is to mirror the performance of Bitcoin, net of operational expenses. To achieve this objective, the trust will hold Bitcoin as part of its investment portfolio, deviating from the conventional cash holdings approach.
Additionally, when the trust sells or redeems its shares, it will do so in blocks of 50,000 shares known as a “Creation Basket.” The value of this basket is determined by the amount of Bitcoin it represents, equivalent to the combined net asset value of the shares within it. In cases involving cash subscriptions, the amount will be calculated based on the cash required to purchase the corresponding Bitcoin amount represented by the Creation Basket.
Progress in the Industry
VanEck’s amended filing places them among a growing cohort of asset managers who are revising their applications for spot Bitcoin ETFs. This trend indicates potential progress in negotiations between asset managers and regulators, as they work towards addressing the concerns raised by the SEC.
Other asset managers, including Bitwise Asset Management, ARK Invest, and 21Shares, have also submitted amended applications in response to the SEC’s concerns about their spot Bitcoin ETF proposals. These revised filings provide additional details about custody and valuation practices, further demonstrating the commitment of these asset managers to create a robust and compliant offering in the cryptocurrency space.
Despite the delays caused by the SEC’s postponed decisions on various spot Bitcoin ETF proposals, market participants and analysts anticipate a resolution within the coming weeks. This anticipation reflects the growing interest and demand for regulated investment products tied to Bitcoin.
Expansion into the Cryptocurrency Space
Besides their endeavors in the spot Bitcoin ETF market, VanEck is also making significant strides in the cryptocurrency space. They have recently gained approval from the SEC to launch Ethereum-styled futures contracts. The forthcoming Ether Futures ETF will be a fully standardized product featuring cash-settled futures contracts accessible for trading on the Commodity Futures Trading Commission’s (CFTC) regulated commodities platform.
