ETFs

VanEck to launch second bitcoin futures ETF in the US

TL; DR Breakdown

  • VanEck, a leading asset manager, has received approval from the SEC for its bitcoin futures ETF.
  • This will be the second listing of a bitcoin futures ETF in America after ProShares launched yesterday with their biggest ETF launch yet.

Next week, VanEck will join ProShares in launching a bitcoin futures exchange-traded fund (ETF). VanEck revealed it had secured approval to launch its bitcoin-linked ETF. 

Yet, it came via a post-effective filing with the U.S. Securities and Exchange Commission (SEC). Thus, indicating that they have permitted Launch Day on October 23rd. So, the trading will start on Monday, October 25th.

“The Fund is an actively managed exchange-traded fund (ETF.) It seeks to achieve its investment aim by investing in graded, cash-settled bitcoin futures contracts. These traded on commodity exchanges registered with the Commodity Futures Trading Commission (CFTC). For example, the Chicago Mercantile Exchange (CME). The Fund does not invest in bitcoin or other digital assets directly,” the filing noted.

VanEck funds drive

The company plans on raising funds worth $20 million to offer investors sets of ETFs that invest only in cryptos.

The incredible rise of Bitcoin has been a hot topic in recent weeks and the first bitcoin futures. Regulators finally approved ETF over at SEC. The ProShares product got off to a fantastic start on Tuesday when it launched as one of the most significant ETF debuts.

Bitcoin is now available for the first time in its history as an ETF in the USA. Linking ETF to bitcoin is a significant landmark for the digital currency industry. Certain European nations took the lead in allowing Bitcoin ETFs. And currently, the USA is embracing the idea to see ETFs and exchange-traded products go live.

VanEck ETF and ProShares ETF to provide Bitcoin exposure

The VanEck ETF and ProShares ETF seek to provide investors with bitcoin exposure through futures contracts. These two investment funds, however, will not hold actual bitcoins themselves. Instead, they trade on the exchanges like any other security, or commodity product would do.

The approval of physically backed bitcoin ETFs by regulators in Canada opened up a new opportunity for investors. Yet, the USA only allows futures-linked ETFs to go live.

The Chairman of the SEC, Gary Gensler, has opened up an avenue for ETFs to register under the Investment Company Act 1940. This is because he holds they give more protection than their equals governed by the Securities act 1933

Bitcoin is on a roll just a day after the launch of Proshare. The cryptocurrency hit an all-time high of $65k this week, following the success of two separate products due to launch. Seemingly, people have been expecting Bitcoin futures ETFs for months. It is likely Bitcoin might surge further after this launch.

This post was last modified on October 20, 2021 9:19 pm

Edith Muthoni

Edith is an investment writer, trader, and personal finance coach specializing in investments advice around the fintech niche. Her fields of expertise include stocks, cryptocurrencies, blockchain, and cryptocurrency investments.

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