- The US Securities and Exchanges Commission (SEC) has rejected VanEck Funds’ application for listing a Bitcoin (BTC) Spot Exchange Traded Fund (ETF).
- The decision has left Jan Van Eck, the fund’s chief executive, frustrated.’
The SEC has left Jan Van Eck, chief executive of VanEck Funds, a frustrated man. He’s frustrated because the watchdog dashed VanEck’s hopes of launching a BTC Spot ETF on Friday.
Consequently, Van Eck took to Twitter to express his frustrations with the agency. In the post, he told of his disappointment at the SEC’s rejection of their application.
The firm had sought approval for its product in late 2020. It had roped in crypto trading platform Cboe BZX Exchange. This exchange was to list the EFT once accepted.
Cboe was also the one behind VanEck’s push for regulatory acceptance. The exchange had sought a change in the SEC’s rules to allow for the ETF’s listing.
Notwithstanding the disappointment, Van Eck held that investors should access BTC through regulated funds. And to him, a non-futures ETF is the best option for achieving that goal
We are disappointed in today’s update from the SEC declining approval of our physical bitcoin ETF. We believe that investors should be able to gain #BTC exposure through a regulated fund and that a non-futures ETF structure is the superior approach. @tyler @gaborgurbacs— Jan van Eck (@JanvanEck3) November 12, 2021
The VanECk-Cboe BZX application had attracted a lot of attention within the U.S. Had it gone through, it would have ushered in a new era in spot BTC ETF trading. Besides, the regulator had postponed a decision on the matter severally.
SEC dimming Van Eck
The SEC stated that the fund fell short of Section 6(b)(5) of the Exchange Act. This section requires national securities exchanges to show the ability to stem fraud and manipulation. Again, they should look to secure the interests of both investors and the public.
Before the announcement, there was a growing expectation that the SEC would greenlight the ETF. This belief had speculators suggesting that BTC would ride on the approval to get to $80,000. Eric Weiss, a digital asset manager, is one of them.
However, not everyone shared this optimism. Some analysts had already cast doubt on VanEck’s success in its application. For instance, Bloomberg’s Eric Balchunas had given the application a less than one percent chance of succeeding.
While painting those grim prospects, Balchunas had mentioned the SEC’s knack for denying such applications. For emphasis, he stated that the Eagles had better odds of clinching the Super Bowl. The Eagles are one of the less fancied teams in the NFL.
True to their tradition, The SEC dimmed VanEck’s hopes. The agency’s opposition to BTC-tracking ETFs is well documented. Its chair Gary Gensler has shown support for future-based BTC ETFs.
Gensler has also likened the crypto ecosystem to the wild west. Moreover, he holds that the cryptoverse is prone to abuse. That’s because it’s teaming with fraudsters and scammers.
Which way Spot ETF?
SEC’s decision has divided opinions among crypto lovers. The Blockchain Association, for instance, has taken issue with the decision. It has expressed its disagreement with the agency for refusing investors access to Spot BTC ETFs.
1/ Today, the SEC released an order disapproving @vaneck_us's proposal for a spot bitcoin ETF. We're disappointed by the SEC's continued refusal to give investors access to a spot bitcoin vehicle and strongly disagree with the decision.— Blockchain Association (@BlockchainAssn) November 12, 2021
The association has questioned the legal thinking guiding SEC’s ruling. It wondered why the regulator seems to discriminate against BTC. Furthermore, it has called for the approval of the ETF just as the SEC did the futures-based one.
Others like Twitter use @saltyboyy1 seem less bothered by the turn of events. Commenting on Jan Van Eck’s tweet, he said that that shouldn’t be a concern. He insisted that BTC didn’t need a spot ETF as it had done well without one over the last decade.
Following Friday’s decision, the fate of other such applications remains in the balance. Some analysts hold that the ruling has merely delayed the rollout of a product that many are clamoring for.
VanEck Filed for Digital Assets Mining ETF
Global investment manager VanEck, with more than $60 billion assets under management, has filed an application to establish an exchange-traded fund that will track the price and yield performance of the Global Digital Asset Mining index.
Fund’s investment principles
The Global Digital Asset Mining index is being used to track the performance of companies that are somehow engaged in digital assets mining activities, including Bitcoin or altcoin mining operations. Additionally, companies that provide various services like software development, as well as hardware suppliers, also fall into the category of mining operations providers.
The fund will invest at least 80% of its total assets in securities in the DAMC but, at the same time, the company is not allowed to invest in digital assets by using derivatives products like options or futures. Hence, the fund is not going to track the price movement of any cryptocurrency.
The VanEck ETF will be able to provide exposure to companies that are in fact operating with digital assets or holding them on their balance sheet and are also being presented in the Global Digital Assets Mining index.
Risks for investors
The application also contains a section related to the risks behind the digital assets mining industry. According to the filing, the main risks for investors are technological obsolescence, supply chain issues and certain issues with obtaining new hardware.
Additionally, the fund agrees that most digital assets mining companies are exposed to the issue of relying on third-party companies that are located and functioning overseas.
In addition to risks tied to hardware wearing, digital assets miners generate revenue from selling their assets on various cryptocurrency exchanges, and the price of their assets is a subject of high volatility that could lead to the value loss of their holdings.
While most cryptocurrency miners remain in high profit from their operations, rapid change of assets like Bitcoin may potentially lead to additional losses of those companies and, therefore, losses for investors that receive direct exposure to the aforementioned index.
1inch Network Raises $175 Million from VanEck, Alameda Research
1inch Network has secured $175 million funding to enhance its products for the entrance of institutional investors.
The popular decentralized exchange 1inch Network has raised $175 million in a Series B funding round. Some of the notable names that participated in the event include VanEck, Alameda Research, Gemini Frontier Fund, and Tribe Capital.
1inch Secures $175 Million
The press release seen by CryptoPotato reads that aside from the aforementioned names taking part in the funding round, Jane Street, Fenbushi Capital, Celsius, and Nexo were also involved, while Amber Group led the event.
As so many new names have participated in the funding round, 1inch said it will lead to “further decentralization” of its ecosystem, “making it more democratic by allowing everyone’s votes to matter.”
The DeFi project explained that it plans to utilize the amount to expand its services and focus on traditional investors. In fact, 1inch aims to facilitate their entrance into the decentralized finance space by creating new protocols, additional utilities for the native cryptocurrency, and scaling up the contributor team.
“While continuing to keep the existing DeFi audience happy by delivering state-of-the-art products, 1inch also aims to become a gateway for institutions that want to be part of the DeFi space.” – commented Sergej Kunz, 1inch Network co-founder.
He believes that in the next few years, institutional investors will pour more than $1 trillion, which is why 1inch will focus on providing better services for them. More precisely, the project wants to onboard such investors into its 1inch Pro platform as it expects to “more than double” its current size by 2025.
$70M Turned Into $175M
The press release also informed that 1inch initially aimed to raise $70 million with this funding round. However, some most recent developments in the DeFi space and the “huge demand from valuable backers” prompted the project to increase it by over $100 million.
Tiantian Kullander, co-founder and managing partner of Amber Group, said institutional investors require “seamless access to liquidity across different protocols and chains” before they enter the space. This is why his team has chosen to invest in 1inch.
“We have been truly impressed by the 1inch team’s pace of product innovation and are extremely excited to partner with them as they continue to build the go-to hub for the DeFi ecosystem.” – Kullander added.
VanEck Bitcoin Futures ETF Gets SEC Greenlight After Spot Rejection
VanEck has had a rollercoaster of a month with its Bitcoin ETFs. After three Bitcoin Futures ETFs were approved by the Securities and Exchange Commission, Spot ETFs became the next big thing as they posed a greater advantage for traders. However, this would prove to not be happening anytime soon as the VanEck Spot Bitcoin ETF was rejected by the regulatory body.
However, all hope was not lost for the investment fund as it had doubled back with a bitcoin futures ETF. This time around, VanEck found success as the SEC has approved this ETF.
VanEck ETF Set To Trade On Tuesday
The timing for the VanEck Bitcoin Futures ETF approval could not be better. Interest in the ETFs had died down considerably after an incredibly successful introduction into the market. What followed had been weeks of low performance as traders cashed out the gains that they had made from investing in the ProShares ETF – the first publicly traded bitcoin ETF – and had seemingly moved on to other options.
BTC price hits $60K | Source: BTCUSD on TradingView.com
With the VanEck ETF set to trade on Tuesday, it is expected that this may give the asset a bit of bump after it had been beaten down from the $69,000 ATH. It may not be the Spot ETF it had hoped for but it is no doubt momentous as it will be only the fourth publicly traded bitcoin ETF in the United States. Furthermore, this could spark renewed interest in futures ETFs, leading to high volumed being traded.
The futures ETF which had been filed with the Securities and Exchange Commission in October will begin trading on Tuesday on the Chicago Board Options Exchange (Cboe). The ETF will trade under the ticker XBTF, according to a notice published by the CBOE.
Bouncing Back After A Rejection
The VanEck Spot Bitcoin ETF had gotten a rejection from the SEC last Friday after the regulatory body had reviewed the filing. The reason given for the rejection was that the CBOE could not provide evidence that the fund could protect investors from fraudulent trading. So with the safety of investors’ funds in mind, the SEC had stamped out the ETF.
This rejection had led to the closing of long positions in the market, as reported by Bitcoinist, but this would not last long as the digital asset had had a relatively green week following this. It did however leave bulls in a tight spot as they now had to do more to keep the asset from sliding. Nevertheless, VanEck seems to have taken the rejection in stride.
The rejection of the VanEck Spot ETF has raised speculations for when the space may see the first approval. Grayscale had also filed to have its flagship bitcoin fund converted into a Spot ETF but there has not been any definite action taken on it by the SEC.