VanEck filed with the U.S. Securities and Exchange Commission (SEC) an application to launch ETF based on a Bitcoin strategy. The product will track futures prices and other investment instruments underlying the first cryptocurrency.
The company has already sought to launch a similar product in 2017. As planned, the VanEck Vectors Bitcoin Strategy ETF would invest in Bitcoin futures contracts, as well as swaps and options on futures.
That year VanEck withdrew the filing — the SEC ignored it, as at the time there were no instruments the structure viewed as investment vehicles.
In an interview with CoinDesk, VanEck’s digital assets strategist Gabor Gurbacs noted that futures markets have grown considerably since 2017, so the firm expects regulator approval.
The VanEck Vectors ETF Trust is presented as an actively managed ETF focused on Bitcoin futures and other instruments or products whose underlying asset is digital gold. Its basket may include shares of crypto ETFs registered in foreign jurisdictions, for example, in Canada.
The structure is not designed for direct investment in Bitcoin. All investments will be made through a VanEck subsidiary registered in the Cayman Islands.
The new application was filed under the 1940 Investment Company Act. Previous filings were primarily under provisions dating from the 1930s.
“The fund is classified as a non-diversified fund under the Investment Company Act of 1940, as amended, and therefore may invest a larger percentage of its assets in a single issuer,” the document states.
Earlier, SEC Chair Gary Gensler said that the 1940 Act provides stronger investor protections. He stressed that a fund meeting regulator requirements could be approved.
“Given these important safeguards, I look forward to staff reviewing such filings, especially if they are limited to Bitcoin futures traded on the CME,” added Gensler.
Bloomberg ETF senior analyst Eric Balchunas noted that in the past couple of weeks this was the fourth filing for a Bitcoin-strategy ETF. The analyst expects all of them to be approved.
VanEck just filed for a “Bitcoin Strategy ETF” which will hold bitcoin futures and other bitcoin funds(just like Invesco’s last week). This is the 4th bitcoin futures filing under the 40 Act that Gensler signaled were more likely to be approved. pic.twitter.com/WOdYPID2OQ
— Eric Balchunas (@EricBalchunas) August 10, 2021
Earlier filings for such ETFs were submitted by ProShares and Invesco, and Wilshire Phoenix updated its application to create the wShares Bitcoin Commodity Trust in light of Gensler’s recommendations.
Coinbase had been optimistic about the prospect of ETF approval in the United States in the current or next year.
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