VanEck Submits Bitcoin Futures Strategy Prospectus to SEC

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In Brief
  • VanEck applies for a new Bitcoin Strategy Fund with the U.S. SEC.

  • It emphasizes that it does not invest in bitcoin directly.

  • VanEck has already launched an ETP in Europe, granting exposure to blockchain and crypto companies.

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VanEck has submitted an application with the U.S. SEC for a Bitcoin Strategy Fund that will invest in bitcoin futures contracts, ETPs, and pooled investment vehicles.

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Investment management company VanEck has filed yet another application with the United States, this time a prospectus for a bitcoin futures mutual fund. The “Bitcoin Strategy Fund” offers investment in bitcoin futures contracts, in addition to pooled investment vehicles and exchange-traded products with exposure to the cryptocurrency. It emphasizes that it does not invest in bitcoin directly.

According to the filing, the fund will invest in “certain” bitcoin futures through a subsidiary of the fund that falls under the laws of the Cayman Islands. The fund’s investment in the subsidiary will not exceed 25% of the value of the fund’s total assets at each quarter-end of the fund’s fiscal year. Additionally, the fund may invest in restricted securities — securities acquired in unregistered, private sales from an issuing company — including private investment funds.

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The point about not investing in bitcoin directly is important, as the U.S. SEC is hesitant to approve anything that offers direct exposure to the cryptocurrency for fear of investor risk. This has been one of the key talking points in the ongoing review of ETFs, of which there are now several that the SEC has to deal with.

The application joins a list of others by VanEck, which is going all-in with its hope that 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 cagey about the applications being sent its way, but it could be that analysts believe that will soon change.

Will VanEck’s bitcoin ETFs be approved this year?

VanEck is the most well-known of crypto ETF applicants, with the company already having applied for a Bitcoin ETF and Ether ETF. The former has been delayed by the SEC multiple times, most recently last week, with the new deadline being set to July.

The probability of either ETF being approved by the SEC is uncertain, especially given U.S. authorities’ recent remarks on the crypto space. High-level government officials have said that investor protection and volatility, market manipulation are concerns when it comes to the crypto market. The market’s price drop over the past few days will only bring further reviews of the market.

A broad global scrutiny of the cryptocurrency market has made the potential approval even more dicey. The market is currently in a phase of price consolidation while regulators simultaneously figure out how to protect investors as the asset class ropes in a greater swathe of the public.

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Rahul is an India-based Digital Marketer who became attracted to Bitcoin and blockchain technology in 2014. Ever since, he's been an active member of the community. Other than that, he is a die-hard gamer. This gadget freak is well renowned in his circle for binge-watching Game of Thrones.

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