Jumping on the bitcoin cryptocurrency craze, VanEck has filed with the Securities and Exchange Commission to launch its own bitcoin exchange traded fund strategy.
According to a recent SEC filing, the actively managed VanEck Vectors Bitcoin Strategy ETF will invest in U.S. exchange-traded bitcoin-linked derivative instruments and pooled investment vehicles and exchange traded products that provide exposure to bitcoin. The filed ETF will not hold bitcoins but bitcoin-related securities.
Bitcoin is a decentralized digital currency, or cryptocurrency, based on a peer-to-peer network and can be exchanged through computers internationally without a financial intermediary. The system was first introduced by an unidentified programmer or group under the name of Satoshi Nakamoto in 2009.
Many traders have speculators have hopped on the bitcoin train because the cryptocurrency is not regulated by any government, which incidentally prevented the SEC from green lighting any bitcoin-backed ETF from hitting the market.
Bitcoins have recently garnered greater attention as the cryptocurrency surged past the $4,000 mark over the weekend. A bitcoin is now trading at around $4,270.
It is not immediately clear what caused the sudden rise in bitcoin prices. However, some attributed the recent surge to the bitcoin network officially accepting a long-debated upgrade called segregated witness, which made transactions in bitcoins much easier, reports ars technica. Another attributing factor may be associated with creating a spinoff currency called bitcoin cash, which many anticipated would weaken the appeal of bitcoins but the concerns appear unwarranted.
CBOE Holdings and Gemini Trust Company, the bitcoin exchange owned by the Winklevoss twins, recently reached an agreement that provides the Chicago Board Options Exchange and its affiliates with exclusive global license to use Gemini’s bitcoin market data for bitcoin derivatives and licenses, according to a note.
Further supporting the bitcoin derivatives market, the U.S. Commodity Futures Commission also granted LedgerX, a bitcoin options exchange, the first license to clear and settle derivative contracts for digital currencies, Reuters reported.
With greater access to bitcoin-related derivatives, the proposed VanEck bitcoin ETF may have the necessary infrastructure to put its strategy to market.
For more information on the cryptocurrency, visit our Bitcoin category.