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VanEck has submitted an application to the US SEC for a Bitcoin strategy fund that will invest in Bitcoin futures, ETPs, and pooled investment vehicles.
Investment management firm VanEck has filed yet another request with the United States, this time a prospectus for a bitcoin term mutual fund. The Bitcoin Strategy Fund offers investments in Bitcoin futures, in addition to pooled investment vehicles and exchange traded products with exposure to cryptocurrency. He points out that he does not invest directly in bitcoin.
According to the record, the fund will invest in certain bitcoin futures contracts through a subsidiary of the fund that falls under Cayman Islands law. The fund’s investment in the subsidiary will not exceed 25% of the value of the total assets of the fund at each quarter end of the fund’s financial year. In addition, the fund may invest in restricted securities acquired through unregistered private sales of an issuing company, including private equity funds.
Not investing directly in bitcoin is important, as the US SEC is reluctant to approve anything that offers direct exposure to cryptocurrency for fear of investor risk. This has been one of the main talking points in the ongoing review of ETFs, of which there are now several that the SEC must address.
The app joins a list of others by VanEck, which is going all-in-one in hopes the SEC will approve one soon. It has already launched an ETP in Europe, granting exposure to blockchain and cryptocurrency companies.
The SEC has been cautious about the requests sent to it, but analysts may think that will change soon.
Will VanEcks Bitcoin ETFs be approved this year?
VanEck is the most well-known of the crypto ETF applicants, the company having previously applied for a Bitcoin ETF and an Ether ETF. The former has been repeatedly delayed by the SEC, most recently last week, with the new deadline set for July.
The likelihood of either ETF being approved by the SEC is uncertain, especially given recent remarks by U.S. officials on the crypto space. Senior government officials have said investor protection and volatility, market manipulation are concerns when it comes to the crypto market. Falling market prices over the past few days will only bring further criticism of the market.
A broad global review of the cryptocurrency market has made the potential approval even riskier. The market is currently in a phase of price consolidation as regulators simultaneously determine how to protect investors as the asset class moves closer to more of the public.
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