VanEck Updates Spot Bitcoin ETF App, Special Seeding Approach Signals

VanEyck has made another move to acquire a bitcoin exchange-traded fund (ETF) by filing an amended application with the US Securities and Exchange Commission (SEC).

One notable aspect of VanEck's redacted filing is the disclosure that an unnamed seed capital investor acquired baskets of seed creation for the VanEck Bitcoin Trust in October.

These seeding baskets consist of 50,000 shares of the proposed ETF and are purchased using Bitcoin.

MarketVector Bitcoin Benchmark Rate, an index used as a reference price for the leading cryptocurrency, determined the value of these Bitcoin holdings, says the filing on Friday, October 27th.

According to Scott Johnson, a financial attorney and general partner at Van Buren Capital, Van Eyck's revised filing uses similar language to what appeared in BlackRock's recently revised For Space Bitcoin ETF. They are represented by the same attorneys at Clifford Chance.

VanEck's filing, however, suggests that the product will involve bitcoin rather than seeding it with cash to begin with.

“Be careful not to read too much into this,” Johnson tweeted. “Even now, it's more of a suggestion of good intentions or perhaps lazy jurisprudence.”

Like the Blakrock filing, VanEck's updated application notes a variety of factors that could affect the price of ETF shares, including an increase or decrease in the global supply of Bitcoin, general sentiment toward the industry, exchange activity, forks in the Bitcoin network, as well as “relationships with other digital assets or Competition for payment services has increased.

VanEck joins the list of ETF reformers

VanEck isn't the only firm adjusting its application for a spot Bitcoin ETF to address regulatory concerns.

Bitwise Asset Management filed an update to its Bitcoin ETF application in late September to include hot arguments, which the firm says will undermine the value of regulators' explanations for dissuading US investors from the product.

ARK Invest and 21shares followed suit earlier this month by including more information about their proposed spot Bitcoin ETF in their joint filing, before BlackRock filed an updated prospectus for its own spot Bitcoin ETF.

Spot Bitcoin ETF is a financial product designed to provide exposure to the actual price of Bitcoin, allowing investors to trade and invest without directly owning it. This type of ETF is different from futures-based ETFs, which derive their value from Bitcoin futures contracts. Spot Bitcoin ETFs aim to track the real-time market price of Bitcoin, making them more attractive to traditional investors looking for direct exposure to the cryptocurrency.

The SEC has repeatedly postponed or denied approval of spot Bitcoin ETFs due to concerns related to market manipulation, investor protection and regulatory oversight.

Edited by Liam Kelly.