One key highlight from VanEck's amended filing is the disclosure that an undisclosed seed capital investor acquired Seed Creation Baskets for the VanEck Bitcoin Trust in October. These baskets consist of 50,000 shares of the proposed ETF, and interestingly, they were purchased us...
One key highlight from VanEck's amended filing is the disclosure that an undisclosed seed capital investor acquired Seed Creation Baskets for the VanEck Bitcoin Trust in October. These baskets consist of 50,000 shares of the proposed ETF, and interestingly, they were purchased using Bitcoin. This approach differs from other spot Bitcoin ETF proposals, which typically involve seeding with cash.
The Bitcoin prices for these transactions were determined by the MarketVector Bitcoin Benchmark Rate, an index commonly used as a reference price for the cryptocurrency.
Scott Johnsson, a finance lawyer and general partner at Van Buren Capital, points out that VanEck’s amended filing uses language similar to that in the recently modified filing by Blackrock for its own spot Bitcoin ETF. Both issuers are represented by the same legal team at Clifford Chance, which might explain the similarities. However, VanEck’s approach to incorporate Bitcoin directly into the product, instead of using cash for seeding, sets it apart.
VanEck’s filing also outlines various factors that could influence the value of the ETF shares. These include changes in the global Bitcoin supply, overall sentiment towards the industry, trading activities on exchanges, forks in the Bitcoin blockchain, and competition from other digital assets or payment services.
VanEck is not alone in this endeavor. Other firms like Bitwise Asset Management, ARK Invest, 21Shares, and BlackRock have also been adjusting their applications for spot Bitcoin ETFs to address regulatory concerns. Bitwise, for instance, filed an amendment in September to include arguments against regulators' reasons for denying American investors access to such a product. Similarly, ARK Invest and 21Shares amended their joint application with additional information about their proposed spot Bitcoin ETF.
VanEck, which has over $80 billion in assets under management, seems quite determined to introduce a spot Bitcoin exchange-traded fund (ETF). Despite the previous rejections, the company filed a third application with the SEC while many proposals were getting rejected.
The move also came two years after the SEC rejected VanEck’s proposed bitcoin exchange-traded fund that would have directly tracked the underlying cryptocurrency’s price moves. Citing fraud concerns, which was in line with previous rejections of proposed ETFs, the SEC said the firm couldn’t demonstrate it would be able to prevent fraudulent trading to protect investors.