VanEck Bitcoin ETF May Use Bitcoin for Seed Funding

  • VanEck’s updated prospectus for a proposed Bitcoin spot ETF contains seed funding language similar to BlackRock’s filing.
  • VanEck suggests using actual Bitcoin for seed funding, unlike BlackRock’s cash-based approach.
  • Seed funding involves financial institutions contributing capital to purchase ETF underlying assets in exchange for tradable shares, providing initial liquidity.

According to lawyer Scott Johnsson, the updated prospectus for VanEck’s proposed Bitcoin spot ETF contains seed funding language similar to BlackRock’s filing. However, instead of using cash for seed funding, VanEck recommends using actual bitcoin.

Seed funding is when financial institutions contribute capital to purchase an ETF’s underlying assets in exchange for shares that can be traded when the ETF launches. This provides initial liquidity.

In a post on X, Johnsson noted the similar wording to BlackRock’s recent amendment, likely since both firms use the same law firm, Clifford Chance. But he points out VanEck’s unique proposal to potentially seed its ETF with bitcoin rather than cash.

While cautioning against reading too much into it, Johnsson suggested this could indicate real intent from VanEck or “lazy lawyering.” 

Using bitcoin itself for seed funding would seemingly be a novel approach, immediately giving the ETF direct bitcoin exposure from day one. However, uncertainties remain around if and when the SEC might approve a spot bitcoin ETF.

VanEck filed a new application for a Bitcoin ETF in July 2023. Several other major financial companies, including BlackRock, Bitwise, WisdomTree, Fidelity, and Invesco, also have filings for potential bitcoin ETFs before the SEC.

The SEC has denied dozens of spot bitcoin ETF proposals in the past, citing concerns around fraud, investor protection, and the potential for manipulation. But pressure is building for approval in 2023 as the crypto industry awaits the first U.S.-listed bitcoin ETF.

Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.

Comments

Post a Comment

Popular posts from this blog

Barry Silbert deletes old tweets amid GBTC selloff

Under-fire Digital Currency Group founder Barry Silbert has apparently deleted a raft of his old tweets . According to his X (formerly Twitter) account, Silbert signed up in October 2011, however, at the time of writing, his timeline shows no tweets or replies older than January 5 this year. Luckily for die-hard Silbert fans, X user Pledditor has screenshotted some of his “greatest hits.” Looks like @BarrySilbert has deleted all his old tweets The good news? I have screenshotted some of his greatest hits pic.twitter.com/GLWPbCf5mN — Pledditor #FixTheFilters (@Pledditor) January 15, 2024 Read more: Former DCG advisor Larry Summers on list of Jeffrey Epstein’s ‘Harvard friends’ Among the messages saved by Pledditor is a classic in which Silbert brands himself a “ complete and total professional failure ,” and one in which he advises Dogecoin holders to convert it to bitcoin. It’s not clear what prompted Silbert’s Social Media cull but he’s currently taking Social Media ...
Read more

Trader Issues Warning on Solana Rival That’s Up 247% in One Month, Updates Outlook on LDO and One Other Altcoin

Image
A widely followed crypto strategist warns that a Solana (SOL) competitor that’s up more than 3x in the last 30 days is flashing signals that it may have printed a short-term top. The pseudonymous analyst known as Altcoin Sherpa tells his 205,700 followers on the social media platform X that while layer-1 blockchain Sei (SEI) is still in an uptrend, it starting to show signs of bullish exhaustion. “Why it looks good: -consolidation and highly bullish high time frame market structure -still bullish on all time frames -EMAs (exponential moving averages) all catching up + other alts looking strong Why it doesn’t: -could be an exhaustion pump here and last big move up -could be rotation from others (SOL/SEI/etc/) to ETH season also known as ARB/LDO/OP -dying volume/some signs of distribution here.”  Source: Altcoin Sherpa/X At time of writing, SEI is trading for $0.785, up over 247% from its 30-day low of $0.226. The trader is also keep...
Read more

Nuant becomes a member of the OpenWealth Association

On January 18, Nuant joined the OpenWealth Association, contributing to advancing digital assets risk management within Swiss banking, WealthTech, and traditional finance, per the information shared with Finbold. In doing so, Nuant recently joined traditional finance entities such as Credit Suisse, LGT, VP Bank, and WealthTech firms like Assetmax and InvestSuite. This strategic partnership represents a noteworthy progression in crypto investment risk management within Switzerland’s financial sector. The OpenWealth Association aims to establish, uphold, and implement open Application Programming Interface (API) standards within the global wealth management community. This commitment aims to facilitate seamless financial data exchange among institutions. Nuant as representative of the CeDeFi sector Cryptocurrency Anthony Scaramucci says Bitcoin to skyrocket to $170,000 by 2025 Cryptocurrency Donald Trump says he’ll ‘never allow a CBDC’ if elec...
Read more