On June 21, the asset manager Vaneck submitted a prospectus to launch a so-called Bitcoin strategy fund. The prospectus, filed with the US Securities and Exchange Commission (SEC), states that the fund will procure exchange-traded bitcoin products and futures.
Vaneck’s fund will invest in bitcoin futures and pooled investments tied to the leading crypto asset
While fund manager Vaneck is waiting for a decision on its registration as an exchange traded fund (ETF), the company filed with the SEC to set up a mutual fund for investors who want exposure to Bitcoin. The registration filed on June 21 also advises 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 using 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 is referred to as the “Bitcoin Strategy Fund” and the “stock price and return of the fund will fluctuate with changes in the market value of the fund’s securities portfolios”.
The fund Vaneck discusses in its prospectus is not going to source Bitcoin (BTC) directly and of course the prospectus filing mentions the risks associated with the cryptocurrency markets. “The value of Bitcoin and thus the fund’s Bitcoin-related investments could quickly drop, even to zero. You should be prepared to lose all of your investment, ”warns the Vaneck file.
Vaneck’s Bitcoin ETF delayed twice and the company’s Ethereum ETF prospectus waiting in the background
Vaneck goes on to say that the fund’s risks are not only tied to the volatility of Bitcoin prices, as the fund is also associated with other risks. The asset manager’s registration form with the SEC also mentions the risks associated with pooled investment vehicles, target exposure and rebalancing, borrowing and leverage, tracking errors, credit problems, and interest rate differentials.
In the meantime, Vaneck has taken steps in Europe with its exchange-traded products and the asset manager also wants to launch an Ethereum-based ETF. Vaneck’s proposed Ethereum ETF filing targets a Cboe BZX listing. The company’s Bitcoin (BTC) -based ETF, which was filed back in December 2020, has so far been delayed twice by the SEC in relation to the regulator’s decision.
What do you think of Vaneck launching a bitcoin mutual fund with the SEC that invests in bitcoin futures and pooled investments? Let us know what you think on this matter in the comments below.
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