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VanEck Makes the Case for Institutional Bitcoin Investment

VanEck has outlined the case for institutional Bitcoin (BTC) investment in a report published on Jan. 29. According to the investment management firm, even a small amount of BTC allocation could improve a portfolio’s upside.

As shown in the report, Bitcoin has a history of outperforming tradition asset classes as well as a track record of strong growth over longer three to five year periods. Bitcoin also enhances the diversity of a portfolio as its movements bear very little correlation to the broad market equity indices, bonds and gold.

Source: VanEck – The Investment Case for Bitcoin

As shown in the chart below, the report finds, “A small allocation to Bitcoin significantly enhanced the cumulative return of a 60% equity and 40% bonds portfolio allocation mix while only minimally impacting its volatility.”

Source: VanEck – The Investment Case for Bitcoin

Despite the evidence presented, VanEck’s report explains that the main deterrent for institutional adoption Bitcoin revolves around the lack of infrastructure to connect it to capital markets and its nature as a bearer asset.

VanEck explains that BTC is not quite a currency but still has the potential to become one. The report also suggests Bitcoin bears the necessary features that could see it become a digital gold, but its future monetary value hinges heavily on how people’s perceptions of its value develop.

BTC Exchange Traded Funds

The report highlighted the crypto industries momentum being carried into 2020, citing regulatory achievements in Colorado and Wyoming and the launch of physically settled BTC futures.

The reports also mention the Exchange Traded Funds(ETF)s that are under consideration and mention that the previously withdrawn VanEck-SolidX proposal is back in the race and slated to be reviewed next.

One BTC Exchange Traded Fund that we will not see in 2020, or anytime soon, is the highly anticipated Bitwise ETF.

On Jan. 14, Bitwise submitted a note to the US Securities and Exchange Commission (SEC) requesting the registration withdrawal. The cryptocurrency asset management firm cited the move as being consistent with “public interest” and “protection of investors.”

According to an article by The Block, Matt Hougan, Global Head of Research, Bitwise confirmed, “We did indeed withdraw the application. This is a procedural step, and we intend to refile our application at the appropriate time.”

Upon its initial filing, Bitwise received a 112-page response from the SEC and Hougan added that the firm is currently working this document but remains committed to the development of the Bitcoin ETF.

Image via Shutterstock

SEC Postpones VanEck's Bitcoin ETF Application to June

Those who had been anticipating a decision on the Bitcoin exchange-traded fund (ETF) application from VanEck may have to wait longer to get an answer.

The United States Securities and Exchange Commission (SEC) has exercised its right and has postponed its scheduled decision on VanEck’s ETF application from May 3rd to June 17 according to a filing released by the commission on Wednesday.

VanEck has been at the forefront of pursuing a Bitcoin ETF product in the United States. The company’s push has been ill-favoured as the US has rejected every ETF application submitted before it prior to this time. VanEck reapplied back in March, and the SEC responded, making a case that it needed more time to review the application.

“The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the comments received,” said SEC Assistant Secretary J. Matthew DeLesDernier in the filing.

The SEC altogether can postpone the review process to up to 240 days, and if this extended timeline is applied to VanEck, the company may not be getting a definitive answer until mid-November.

The Case for a Bitcoin ETF

There are more than 8 Bitcoin ETF applications awaiting approval from the SEC. Amongst the notable firms that have sent in their application include Fidelity investments which also filed its application back in March.

As the price of Bitcoin has grown remarkably this year, and institutional funds continue to flow into the digital asset, market stakeholders are pressing on the SEC to soften its stance and introduce exchange-traded fund products in the US. This will boost further mainstream adoption of cryptocurrency and push for better regulations for the industry, says market stakeholders.

While Canada has outpaced the US in its Bitcoin ETF approvals, many anticipate that with Gary Gensler as the new SEC Chairman, cryptocurrency regulations may be reshaped and addressed quicker.

U.S. SEC Postpones VanEck’s Bitcoin ETF Application Again

U.S. Securities and Exchange Commission (SEC) Wednesday once again postponed to decide the application of VanEck Bitcoin Trust’s proposed Bitcoin ETF.

This move is the second time delay to extend the review period on the application of Bitcoin ETF since April. According to Bloomberg’s coverage, the regulator disclosed in a filing that it would look for more public opinion in response to the proposal which product intends to list on Cboe Global Markets.

In the same filing, the authority also asked the public for comments if the proposed Trust and Shares associated with the ETF would be susceptible to manipulation.

Other questions include its ability to prevent fraudulent acts and the sustainability of the regulation in the Bitcoin market. The deadline has set to July and may extend to August, if necessary.

Some analysts believe SEC concerns lack proper surveillance over the crypto exchanges to protect stakeholders’ interest in investments.

VanEck filed its ETF proposal at the end of last year, which it considers the first Bitcoin ETF. Cboe BZX agreed to act as VanEck’s exchange partner earlier this year.

Yet, relative applicants are needed to review within 45 days. The finical agency has the authority to postpone the review process up to 240 days, which means the uncertainty can last until mid-November before the administration making decisions.

VanEck And ProShares Withdraw Plans to List Ethereum ETFs

The emerging report shows that VanEck global investment manager and ProShares investment firm, have withdrawn their applications with the US Securities and Exchange Commission (SEC) for their proposed Ethereum Exchange-Traded Funds (ETFs).

Both investment firms filed separate proposals for Ethereum futures ETFs to the market regulator on Wednesday, August 18.

However, both VanEck and ProShares sent separate letters to the SEC on Friday, August 20, asking for the VanEck Ethereum Strategy ETF and the ProShares Ether Strategy ETF to be withdrawn, respectively. As a result, the moves dampen hopes that a crypto ETF might be approved in the US this year.

On August 3, US SEC chairman Gary Gensler hinted that he would be more open to ETFs linked to Bitcoin futures, like those on the Chicago Mercantile Exchange, not physical Bitcoin.

Gensler’s comment led to a flood of filings for Bitcoin futures ETFs. For instance, on August 10, VanEck filed with the SEC for a Bitcoin strategy futures ETF. Last week on August 17, Galaxy Digital, financial services firm led by crypto bull Michael Novogratz also filed with the SEC for a Bitcoin futures ETF.

VanEck followed its Bitcoin futures ETFs application with the Ethereum futures ETF proposal on Wednesday, August 18. ProShares also submitted its application for EFT with exposure to Ether on the same day.

However, on Friday, August 20, legal representatives of both VanEck and ProShares stated that the fund managers have decided not to proceed with registering their respective Ether-based exchange-traded funds.

It is unclear why both investment firms decided to apply for and withdrew similar applications for the Ether ETFs on the same day.

Crypto ETF Approvals Delay

The news regarding VanEck and ProShares withdrawing their applications may disappoint those in the investment community eager to see the first-ever crypto ETF in the US.

The withdrawals are also disappointing to offer exchange-traded fund products that track widely popular cryptocurrencies like Bitcoin and Ethereum.

Currently, CME is the major place that trades futures for cryptocurrencies on the open market. Industry watchers had stated that the futures trading would provide the key impetus for regulators to approve Bitcoin ETFs, as it would set a concrete price level for valuing the funds.

But that has not been the case, as regulators continue to delay approvals for Bitcoin ETF plans.

The proposed ETF funds would have allowed investors to bet both for and against Ether and Bitcoin. ETFs trade like stocks and would give retailer investors another avenue to get in on the rising cryptocurrency trade, in which Bitcoin and Ethereum prices have exploded more than 1000% over the past year.

SEC Approves VanEck to Launch the Second Bitcoin Futures ETF in the U.S. Markets

A few days after ProShares debuted the first-ever Exchange-Traded Fund linked to Bitcoin futures in the US public markets, VanEck asset management firm announced plans to launch such a product.

According to a post-effective filing with the US Securities and Exchange Commission on Wednesday, October 20, VanEck revealed that it had secured approval from the market regulator to launch its Bitcoin-linked ETF.

The SEC has given VanEck the greenlight to launch its fund after October 23, on a Saturday, and therefore that points to the potential beginning date of Monday, October 25.

VanEck’s Bitcoin futures ETF will only invest in cash-settled Bitcoin futures traded on exchanges registered with the Commodity Futures Trading Commission like the CME Group.

According to SEC’s filing on Wednesday, “the fund is an actively managed exchange-traded fund (’ETF’) that seeks to achieve its investment objective by investing, under normal circumstances, in standardized, cash-settled bitcoin futures contracts (’Bitcoin Futures’) traded on commodity exchanges registered with the Commodity Futures Trading Commission (’CFTC’), such as the Chicago Mercantile Exchange (the ‘CME’). The fund does not invest in bitcoin or other digital assets directly.”

VanEck’s Bitcoin strategy ETF, which will carry the ticker symbol “XBTF”, is set to start trading after October 23 on the Cboe BZX exchange.

VanEck product will give investors exposure to the world’s largest crypto asset by allowing them to trade shares that represent contracts betting at Bitcoin price.

Bitcoin Investing Rises

VanEck is therefore set to give investors another choice of a futures-based product after Tuesday’s launch of the ProShares Bitcoin strategy ETF.

Last week, the US SEC officially permitted the launch of what is regarded as the first-ever Bitcoin futures ETF, which began trading this week, immediately becoming the largest ETF debut in US history.

Shares of ProShares Bitcoin futures ETF started trading on the New York Stock Exchange on Tuesday, October 19, under the ticker symbol “BITO” ProShares, with reports showing that the ETF was purchased $570 million in assets on its launch day. The ProShares Bitcoin ETF was the second-most heavily traded fund, landing turnover of almost $1 billion with more than 24 million shares exchanged, according to Bloomberg data.

The approvals of ProShares and VanEck’s products mark the first time US investors can purchase and trade shares of an ETF directly tied to Bitcoin. The US follows the footsteps of Canada and some other European countries, which have already allowed trading of Bitcoin ETFs and other exchange-traded products.

VanEck To Launch Bitcoin Futures ETF on Cboe Stock Exchange

VanEck is preparing to launch its Bitcoin futures exchange-traded fund (ETF) after delays since winning the US Securities and Exchange Commission’s (SEC) approval in late October.

The Chicago Board Options Exchange (Cboe) announced on November 15 that the ETF and mutual fund management firm’s Bitcoin future’s ETF would begin trading on the stock exchange under the ticker symbol “XBTF” on November 16.

The announcement regarding VanEck’s Bitcoin futures ETF’s launch date comes after the SEC rejected the application for a long-awaited spot Bitcoin ETF from VanEck on November 12, citing exchange rules linked to preventing manipulation and fraud.

Kyle DaCruz, VanEck’s director of digital assets, on Monday spoke about the launch product said: “It’s no secret that we as a firm feel that a physical spot product is a superior product, and so we thought we would see that through. Once we received the SEC’s decision, we decided to bring to market the futures-based product so at least investors have a tool now to access bitcoin through a regulated exchange-traded fund.”

According to SEC’s filing, the VanEck Bitcoin Strategy ETF (XBTF) will only invest in cash-settled bitcoin futures traded on exchanges registered with the Commodity Futures Trading Commission, such as the Chicago Mercantile Exchange (CME) Group.

The Bitcoin futures fund will be the third to be launched on the US market, thus joining the ProShares Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF which was launched on October 18 and October 22 respectively.

Last month, VanEck stated that the fund would begin trading after October 23 on the Cboe BZX exchange, and therefore gives investors exposure to Bitcoin without holding the coin.

Crypto Not Going Away

The VanEck’s Bitcoin Strategy fund launch follows the historic trading of ProShares’ Bitcoin future’s product (BITO) and Valkyrie’s Bitcoin futures ETF (BTF) on public stock exchanges last month.

Cryptocurrency’s journey into the mainstream hit a significant milestone in late October when the first two exchange-traded fund linked to Bitcoin made their stock market debuts.

That means anyone with a brokerage account can purchase and sell Bitcoin backed financial products on the stock market. This comes after years of US regulators shying away from cryptocurrencies, which are extremely volatile. But now, it appears that the government is ready to try new things.

An exchange-traded fund (ETF) is a basket of securities tied to the price of assets such as commodities, bonds, or stocks, which can be bought or sold on stock exchanges. That means that anyone with a brokerage account can trade ETFs.

An ETF linked to Bitcoin is naturally tied to Bitcoin price, and under the Investment Company Act of 1940, all new ETFs are expected to register with the SEC. That detail is vital because the agency’s approval of an ETF linked to Bitcoin suggests that the SEC is open to allowing more products tied to the crypto to be traded.

VanEck Floats its Multi-Coin Crypto ETN in Europe

VanEck, one of the foremost issuers of cryptocurrency-focused investment products, has announced the launch of its multi-coin cryptocurrency fund in Europe.

As revealed by the company, it launched a new Exchange Traded Note (ETN) on the Deutsche Borse Xetra and SIX Swiss Exchange that allows investors to invest in a selected basket of the largest cryptocurrencies.

An exchange-traded note (ETN) is an unsecured debt security that tracks an underlying index of securities. While these product types are peculiar to mainstream or traditional assets, they are becoming increasingly popular in the nascent digital currency ecosystem. The VanEck product comprises Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Polkadot (DOT), Avalanche (AVAX), Tron (TRX), and Polygon (MATIC).

“As the digital assets ecosystem has continued to innovate and grow, we have as well, with a focus on providing professional pricing and indexing via our MV Index Solutions subsidiary, interfacing with global regulators on digital asset ETPs and related topics, publishing high-quality research across a variety of platforms, and building a global product lineup to help investors gain key exposures through transparent, regulated investment structures,” said Gijs Koning, co-head of VanEck Europe.

VanEck is one of the first ETF managers that believed in the transformative power of cryptocurrencies. Today, the company is playing a very pivotal role in ensuring that America gets its first Bitcoin Exchange Traded Fund product that will track the spot price of the digital currency. Previous attempts to float the product were either rejected by the Securities and Exchange Commission (SEC) or withdrawn by its mutual exchange partner, Cboe.

In its unrelenting nature, VanEck successfully listed a futures-based Bitcoin ETF product after securing the SEC’s approval back in October 2021. While the milestone is commendable in the United States, VanEck says it will continue to focus on its education strategies as well as other products that will help everyone keep pace with innovation.

“Education must keep pace with innovation, and for us, the two go hand in hand,” said Matthew Sigel, Head of Digital Assets Research. “We’re excited about all we have built on the digital assets front at VanEck but are even more excited about all that is still to come.”

VanEck Launches Mining ETF on List Today

Investment firm VanEck has launched a mining ETF (DAM), which will officially go public on Wednesday.

Its constituent stocks include Marathon Digital Holdings Inc (8.3%), Riot Blockchain Inc. (11%), Hive Blockchain Technologies Ltd. (6.3%) and Hut 8 Mining Corp (9.1%), Iris Energy (IREN) is 7%, Canaan (CAN) is 6.5%.

Other smaller miners and mining manufacturing companies include Northern Data (NB2.GR) 5.8%, Block (SQ) 5.7%, Bitfarms (BITF) 5.6%, etc.

VanEck Head of Product Management Ed Lopez said in a statement that:

“Blockchains introduce transparency, efficiency and lower costs compared to traditional centralized databases and processes, but without miners, blockchain transactions cannot be verified and audited, making their role absolutely essential,”

The fund will invest at least 80% of its assets in the stock of crypto miners and will track the MVIS Digital Asset Mining Index.

According to a post-effective filing with the US Securities and Exchange Commission on October 20, VanEck revealed that it had secured approval from the market regulator to launch its Bitcoin-linked ETF.

VanEck is preparing to launch its Bitcoin futures exchange-traded fund (ETF) after delays since winning the US Securities and Exchange Commission’s (SEC) approval in October 2021.

A local exchange in Australia also lists a new crypto-miner ETF for the first time in October, aiming to track well-known miners and infrastructure providers worldwide.

VanEck to Launch Community NFT Collection

VanEck, one of the few American asset managers that have a Bitcoin futures Exchange Traded Fund (ETF) product, has announced the launch of its Community NFT Collection.

The firm said the NFT collection is the first of its kind for any asset manager globally and that it will be resident on the Ethereum blockchain network.

The Community NFT Collection, a collection of 1,000 uniquely built digital currencies, was floated in conjunction with South Korean-based startup NOMOMO and was designed as a membership card for the few lucky individuals who will lay their hands on them.

“We’ve designed the VanEck Community NFT to function as a digital membership card, providing NFT holders with exclusive access to a wide range of events, digital asset research, and the insights of an inclusive community of digital assets enthusiasts and investors,” said Matthew Bartlett, VanEck Community NFT Co-Founder.

The NFT collection is symbolic as it will tell the story of finance, drawing insight from the past, evaluating the present, and projecting an ambitious run for the future. With Hammy, modelled after Alexander Hamilton, as its theme personality, the VanEck Community NFT is divided into three unique categories, including commons (which will total 750), rare (approximately 230), and legendary (approximately 20).

The NFT collection will be airdropped to the first 1,000 individuals that register on the project’s portal page starting this week. The VanEck NFT showcases the growing popularity of digital art and collectables, which has been taken to a whole new level by prestigious collections like the Bored Ape Yacht Club (BAYC), and CryptoPunks, amongst others.

Besides VanEck, other major players in the investment and banking world have also waded into the growing NFT world. From KPMG in Canada, which acquired a World of Women (WoW) NFT to identify with the ideology of the entire collection, to Dolce & Gabbana, which has floated its own exclusive NFT collection, the embrace of NFTs by multinational firms is arguably going mainstream today.

VanEc's Crypto Lending Fund Grants $35m Investments from 2 Fairfax Retirement Funds

VanEck, a global investment manager that provides Exchange Traded Fund and Mutual Funds, announced that it has granted a $35 million direct investment from two Fairfax County retirement funds in Virginia for its digital assets lending fund.

The asset manager revealed that the investment was from two of Fairfax County’s retirement systems, including the Fairfax County Employees’ Retirement System and the Fairfax County Police Officers Retirement System respectively.

According to the announcement, Fairfax County may still be injecting additional cash in the near future as the investment was described as the initial tranche of commitment into the VanEck New Finance Income Fund, LP.

Fairfax County’s interest in investing in the VanEck New Finance Income Fund shows that the current crypto winter is not impacting the overall trust in the potential of digital currencies by institutional investors.

The New Finance Income Fund, according to VanEck, was established back in December 2021 and is “designed to seek income opportunities for investors via short-term lending arrangements with digital assets entities through a simplified approach that alleviates the operational burden of direct digital assets lending.”

The asset manager said the fund is only available to institutional investors and takes away the hurdles associated when investors choose to invest in the nascent asset class themselves directly.

VanEck is a major player in the crypto ETF scene that has been making a valid case for institutional investors to wade into the crypto ecosystem. The firm comes off as one of the first organizations that started lobbying the United States Securities and Exchange Commission (SEC) to approve a spot Bitcoin ETF.

While VanEck has quite a number of Bitcoin ETF rejections from the SEC, the firm was ranked as the second to win the regulator’s approval to establish a Bitcoin Futures ETF product in the US after ProShares last year. The company’s products are diversified and have products tracking Bitcoin mining.