On January 31, VanEck, which is a financial institution with nearly $82 billion in assets under management (AUM) with exchange-traded funds (ETFs), institutional accounts, and mutual funds, announced the launch of its first crypto fund. This fund is listed as an exchange-traded note (ETN) on the SIX Swiss and Deutsche Borse Xetra exchanges.
This ETN will provide exposure to seven different major cryptos including Solana (SOL), Tron (TRX), Bitcoin (BTC), Ethereum (ETH), Polygon (MATIC), Polkadot (DOT), and Avalanche (AVAX). The co-head of VanEck Europe, Gijs Koning, explained the reasons why the company needed to facilitate investments in digital currencies and assets:
“In early 2017, we determined that digital assets could provide a store of value alternative to currencies and gold, as well as a host of technology solutions that could bring down costs in the payments and investing industries.”
While VanEck’s crypto financial products are gaining some traction across Europe, they encounter regulatory hiccups in the United States. There, the company’s offerings are restricted to private digital currency funds for the institutional investors and only the stock-based ETFs consisted of firms using blockchain technology.
Buy Bitcoin NowIn November 2021, the U.S. Securities and Exchange Commission (SEC) rejected VanEck’s BTC spot ETF application. While explaining that decision, the regulator cited that the underlying exchange that is responsible for listing the ETF, Cboe BZX, had no proper “surveillance-sharing agreement with markets trading the underlying assets [of Bitcoin].”
The SEC then used the exact rule to reject Fidelity’s Wise Origin Bitcoin Trust spot ETF the week before that. The Valkyrie Bitcoin Strategy ETF and the ProShares Bitcoin Strategy ETF got SEC approval partially because they track the price of regulated bitcoin futures contracts and not the spot price derived from averages of many crypto exchanges.
