VanEck Amends Spot Bitcoin ETF Application, Signals Unique Seeding Approach

Global investment manager VanEck joins the growing list of spot Bitcoin ETF hopefuls to amend their prospectus.

Andrew Asmakov3 min read

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VanEck made another move in its pursuit of a spot Bitcoin exchange-traded fund (ETF), filing an amended application with the U.S. Securities and Exchange Commission (SEC).

One notable aspect of VanEck's amended filing is the revelation that an unnamed seed capital investor acquired Seed Creation Baskets for the VanEck Bitcoin Trust in October.

These Seed Creation Baskets consist of 50,000 shares of the proposed ETF, and they were bought using Bitcoin.

MarketVector Bitcoin Benchmark Rate, an index utilized as a reference price for the leading cryptocurrency, determined the valuation of these Bitcoin holdings, says the Friday, October 27th filing.

As noted by Scott Johnsson, a financial lawyer and general partner at Van Buren Capital, VanEck’s amended filing uses pretty much the same language to that seen in the recently modified Blackrock’s filing for a spot Bitcoin ETF, which is “not too surprising given both issuers are represented by the same lawyers at Clifford Chance.”

VanEck’s filing, however, suggests that to have the product launched it will directly incorporate Bitcoin instead of seeding with cash.

“Caution not to read too much into this,” wrote Johnsson on Twitter. “Still, it's an affirmative addition so either suggestive of actual intent or maybe just rather lazy lawyering.”

Caution not to read too much into this. Still, it's an affirmative addition so either suggestive of actual intent or maybe just rather lazy lawyering.

— Scott Johnsson (@SGJohnsson) October 29, 2023

Similar to Blakrock’s filing, VanEck’s amended application also points to a variety of factors that might impact the value of the ETF shares, including an increase or decrease in the global Bitcoin supply, overall sentiment towards the industry, trading activity on exchanges, forks in the Bitcoin network, as well as “increased competition from other forms of digital assets or payment services.”

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VanEck joins list of ETF amenders

VanEck isn't the only firm adjusting its application for a spot Bitcoin ETF to address regulatory concerns.

Bitwise Asset Management filed an amendment to its Bitcoin ETF application at the end of September to include fresh arguments, which, according to the firm, invalidate regulators' explanations for depriving American investors of the product.

ARK Invest and 21Shares followed suit earlier this month, amending their joint application to include additional information about their proposed spot Bitcoin ETF, before BlackRock submitted an amended prospectus for its own spot Bitcoin ETF.

A spot Bitcoin ETF is a financial product designed to provide investors with exposure to the actual price of Bitcoin, allowing them to trade and invest in the cryptocurrency without directly owning it. This type of ETF is distinct from futures-based ETFs, which derive their value from Bitcoin futures contracts. Spot Bitcoin ETFs aim to track the real-time market price of Bitcoin, making them more attractive to traditional investors seeking direct cryptocurrency exposure.

The SEC, however, has repeatedly postponed or rejected the approval of spot Bitcoin ETFs due to concerns related to market manipulation, investor protection, and regulatory oversight.

Edited by Liam Kelly.