VanEck Files Amended Application for Spot Bitcoin ETF With SEC

Jimmy Aki
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Renowned asset management company VanEck has made substantial progress in its pursuit of launching a spot Bitcoin exchange-traded fund (ETF) by submitting a revised application to the United States Securities and Exchange Commission (SEC).

VanEck Filing Integrates Fund Seeding Method

In the intense race to secure approval from the SEC for a spot Bitcoin ETF, VanEck has made a significant move by submitting a revised application to the US regulator on October 27.

This development follows the SEC’s rejection of VanEck’s proposal to launch and trade shares of its Bitcoin Trust on March 10, marking the third instance where the regulatory body denied the asset management firm’s attempt.

Nevertheless, the latest amended application presents a noteworthy change that could potentially pave the way for approval after years of VanEck’s persistent efforts.

The filing highlights that VanEck will integrate Bitcoin for fund seeding, a different strategy from the conventional cash-based seeding method used by other applications for spot ETFs.

As detailed in the proposal, VanEck Bitcoin Trust ETF will issue common shares of beneficial interest that trade on the renowned Cboe BZX exchange.

However, the Trust’s investment objectives aim to reflect the performance of Bitcoin and the net expenses of the operation.

To achieve this objective, the Trust will hold Bitcoin instead of cash and value its Shares daily based on the reported MarketVector Bitcoin Benchmark Rate to promote transparency.

VanEck recent proposal also highlights a unique work structure compared to other applications. It was emphasized that a specific investor, referred to as a “seed capital investor,” purchased the “Seed Creation Baskets.”

These “Seed Creation Baskets” comprise 50,000 shares of the proposed ETF (Exchange-Traded Fund).

The creation of these baskets is based on the amount of Bitcoin they represent, which is equal to the combined net asset value of the shares within them.

If an investor wishes to purchase shares with cash instead of Bitcoin, the amount needed will be calculated based on the cost required to buy the equivalent amount of Bitcoin represented by the Creation Basket.

This is always determined based on the MarketVector Bitcoin Benchmark Rate.

Essentially, the proposal outlines a significant investment in the ETF using Bitcoin as the asset, and the valuation is based on a specific benchmark rate.

Spot Bitcoin ETF Arena Heats Up Amidst Upcoming Verdict

A spot Bitcoin ETF differs from its counterparts as it involves a direct investment in Bitcoin itself rather than in futures contracts.

This distinction holds great significance because investors in a spot ETF would have actual ownership of Bitcoin, offering them direct exposure to the cryptocurrency.

The unique structure has garnered attraction from asset managers seeking to be the first firm to get their proposal approved and launched.

On September 25, Bitwise Asset Management filed an amended 40-page proposal for a spot Bitcoin ETF, addressing key concerns raised by the SEC on market manipulation and research.

On October 11, American asset manager ARK Investment and 21Shaeres submitted a joint application amendment to the SEC, providing more information on practices for asset custody and valuation.

Industry experts anticipate that more updated applications will be submitted in the upcoming weeks, with these latest revisions reflecting the SEC’s requests for issuers to address market-related concerns about their products.

However, the decision on spot Bitcoin ETF applications from several issuers, including Invesco, Bitwise, BlackRock, Valkyrie, and VanEck, has been delayed, and a verdict is expected to be reached in the coming weeks.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.