On June 21st, wealth management company Vaneck submitted a prospectus to launch the so-called Bitcoin strategic fund. The prospectus submitted to the US Securities and Exchange Commission (SEC) explained that the fund will purchase bitcoin exchange-traded products and futures.
Vaneck’s fund will invest in Bitcoin futures and co-investments related to leading crypto assets
While fund manager Vaneck was waiting to hear about its exchange-traded fund (ETF) registration decision, the company applied to the U.S. Securities and Exchange Commission to issue mutual funds for investors who wished to be exposed to Bitcoin. The registration document submitted on June 21 also stated that in addition to the fund’s Bitcoin-related investments, “the fund is expected to hold a large amount of cash and fixed-income investments.”
Vaneck will invest in Bitcoin futures contracts, use the CME CF Bitcoin Reference Rate (BRR), and “invest in collective investment vehicles that directly or indirectly invest in Bitcoin.” The crypto mutual fund will be called the “Bitcoin Strategy Fund”, and the fund’s “share price and return will fluctuate with changes in the market value of the fund’s investment portfolio.”
The fund discussed in Vaneck’s prospectus will not directly buy Bitcoin (BTC). Of course, the prospectus mentions the risks involved in the cryptocurrency market. “The value of Bitcoin and the value of the fund’s Bitcoin-related investments may decline rapidly, including to zero. You should be prepared to lose all your investment,” the Vaneck document warned.
Vaneck’s Bitcoin ETF was postponed twice, and the company’s Ethereum ETF prospectus is waiting in the background
Vaneck further elaborated that the risk of the fund is not only related to the fluctuation of bitcoin prices, because the fund is also accompanied by other risks. Wealth management institutions mentioned the risks involved in collective investment vehicles, target exposure and rebalancing, borrowing and leverage, tracking errors, credit issues, and interest rate differences in the US Securities and Exchange Commission’s registration form.
At the same time, Vaneck has been taking action in Europe through its exchange-traded products, and the wealth management company is also looking to launch an Ethereum-based ETF. The Ethereum ETF document proposed by Vaneck is aimed at listing Cboe BZX. As far as the regulator’s decision is concerned, the company’s Bitcoin (BTC)-based ETF filed in December 2020 has so far been postponed twice by the US Securities and Exchange Commission.
What do you think of Vaneck’s application to the SEC to launch a Bitcoin mutual fund to invest in Bitcoin futures and collective investment? Please tell us your thoughts on this topic in the comments section below.
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