VanEck’s Amended Application for Spot Bitcoin ETF Signals Crypto Market Evolution

By 0xK2 10/30/23 1:01 AM

Asset management firm VanEck filed an amended application for a spot Bitcoin exchange-traded fund (ETF) on October 27 with the United States Securities and Exchange Commission (SEC), according to the regulator’s database. This development is part of an ongoing effort to bring cryptocurrency investment products to the mainstream financial market.

The most notable aspect of this updated filing is the revelation that a seed capital investor purchased the Seed Creation Baskets in October. These baskets represent a block of 50,000 shares of the proposed ETF. What sets this purchase apart from others is that it was made with Bitcoin, and the prices were determined using the MarketVector Bitcoin Benchmark Rate, an index used as a reference price for the cryptocurrency. This new approach marks a departure from other spot Bitcoin ETF proposals, which have used cash for their seeding.

Finance lawyer Scott Johnsson weighed in on the significance of this development, pointing out that this novel approach signifies a departure from the norm, as most ETFs dealing with Bitcoin have historically used cash for their initial funding. A spot Bitcoin ETF, in contrast, would directly invest in the cryptocurrency itself rather than its futures, giving investors direct exposure to the underlying asset.

This new filing underscores the growing interest in the spot version of a Bitcoin ETF, as it provides a gateway for traditional asset managers to meet the demands of investors seeking direct Bitcoin exposure. With the cryptocurrency market continuing to gain traction, such an ETF could potentially draw substantial investments from individuals and institutions eager to tap into the ever-expanding world of digital assets.

VanEck’s updated application is just one of many, as several other asset management firms are also revising their proposals for spot Bitcoin ETFs. In September, Bitwise Asset Management filed an amended application in response to the SEC’s concerns about the product, showing that there’s a concerted effort within the industry to address regulatory hurdles.

Notably, earlier this month, ARK Invest and 21Shares also made amendments to their joint application, providing additional details about their proposed spot Bitcoin ETF. This included information on their practices for asset custody and valuation, demonstrating a commitment to ensuring the fund’s integrity and security.

The SEC has been reviewing multiple spot Bitcoin ETF proposals, and the agency has recently delayed its decision on these products. The proposals under consideration come from prominent firms such as BlackRock, Invesco, Bitwise, VanEck, and Valkyrie. Market participants and industry analysts are closely watching the developments, with expectations that a decision may be reached in the coming weeks.