Without a dedicated Bitcoin exchange traded fund available in the U.S., investors options are to directly buying the largest digital asset, the futures market, or some blockchain ETFs.
Another option appears to be on the way, with VanEck filing plans for the VanEck Vectors Digital Assets ETF. The concept was revealed in a recent filing with the Securities and Exchange Commission.
“Digital asset companies may include small- and medium-capitalization companies and foreign and emerging market issuers, and the Fund may invest in depositary receipts and securities denominated in foreign currencies,” according to the filing.
It’s not immediately clear if the new ETF will be comparable to existing blockchain funds on the market.
VanEck Seeking to Leverage Blockchain, Bitcoin
Blockchain, the underlying technology that forms the basis for cryptocurrencies, has plenty of other real-world uses. Blockchain itself has been a hot topic with companies like investment firm UBS looking to implement the transactional technology in the financial sector. Other industries, including healthcare and retail, are expected to be major adopters of blockchain.
While there are dichotomies surrounding the blockchain thesis, the story remains compelling for many.
VanEck’s Digital Assets ETF will follow the MVIS Global Digital Assets Equity Index.
“To be initially eligible for inclusion in the Index, a company must generate at least 50% of its revenues from (i) digital assets projects or (ii) projects that, when developed, have the potential to generate at least 50% of their revenues from the digital assets industry,” according to the filing.
“Companies with less than 50% of their revenues from the global digital assets segment, including semiconductor and online money transfer companies, may be added to the index to reach a minimum component number. Index component weights are based upon free-float market capitalization and individual components are limited to a maximum of an 8% weighting in the Index.”
Last month, VanEck filed plans for the VanEck Bitcoin Trust.
“The Trust’s investment objective is to reflect the performance of the MVIS® CryptoCompare Bitcoin Benchmark Rate less the expenses of the Trust’s operations. In seeking to achieve its investment objective, the Trust will hold bitcoin and will value its Shares daily based on the reported MVIS® CryptoCompare Bitcoin Benchmark Rate, which is calculated based on prices contributed by exchanges that the Sponsor’s affiliate, MV Index Solutions GmbH (“MVIS”), believes represent the top five bitcoin exchanges based on the industry leading CryptoCompare Exchange Benchmark review report,” according to that filing.
If the fund comes to market, it will trade on the CBOE.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.