Vaneck Files Prospectus With US Regulator to Launch a Bitcoin Mutual Fund
On June 21, the wealth manager Vaneck filed a prospectus to launch what it calls a Bitcoin Strategy Fund. The prospectus filed with the U.S. Securities and Exchange Commission (SEC) explains the fund will procure bitcoin exchange-traded products and futures.
Vaneck’s Fund Will Invest in Bitcoin Futures and Pooled Investments Tied to the Leading Crypto Asset
While the fund manager Vaneck waits to hear a decision about its exchange-traded fund (ETF) registration, the company applied with the SEC to release a mutual fund for investors who want exposure to bitcoin. The registration filed on June 21, also notes that in addition to the Fund’s bitcoin-related investments, “the fund expects to have significant holdings of cash and fixed-income investments.”
Vaneck will invest in bitcoin futures contracts, leverage the CME CF Bitcoin Reference Rate (BRR), and also “invest in pooled investment vehicles that invest directly or indirectly in bitcoin.” The crypto mutual fund will be dubbed the “Bitcoin Strategy Fund” and the fund’s “share price and return will fluctuate with changes in the market value of the fund’s portfolio securities.”
The fund Vaneck discusses in its prospectus will not procure bitcoin (BTC) directly and of course, the prospectus filing mentions the risks involved with cryptocurrency markets. “The value of bitcoin and, therefore, of the fund’s bitcoin-related investments, could decline rapidly, including to zero. You should be prepared to lose your entire investment,” the Vaneck filing warns.
Vaneck’s Bitcoin ETF Delayed Twice and the Firm’s Ethereum ETF Prospectus Waits in the Background
Vaneck further details that the fund’s risks are not solely tied to the volatility of bitcoin prices as the fund comes with other risks as well. The wealth manager’s registration form with the SEC mentions the risks involved with pooled investment vehicles, target exposure and rebalancing, borrowing and leverage, tracking errors, credit issues, and interest rate discrepancies as well.
Meanwhile, Vaneck has been making moves in Europe with its exchange-traded products and the wealth manager is also looking to launch an ethereum-based ETF. Vaneck’s proposed ethereum ETF filing is aiming for a Cboe BZX listing. The company’s bitcoin (BTC)-based ETF filed back in December 2020, has so far been delayed twice by the SEC as far as the regulator’s decision is concerned.
What do you think about Vaneck applying with the SEC to launch a bitcoin mutual fund that invests in bitcoin futures and pooled investments? Let us know what you think about this subject in the comments section below.
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Author: Jamie Redman