VanEck Files Fresh Spot Bitcoin ETF Application
Published
Days after Grayscale’s Bitcoin ETF application was rejected, investment Firm VanEck has filed a new application with the SEC.
By Matt BrienenNew York-based asset management firm VanEck has filed a new application with the Securities and Exchange Commission (SEC) for its spot market Bitcoin ETF.
A Bitcoin ETF would allow more traditional investors uncomfortable directly managing cryptocurrencies to gain exposure to the asset.
In November 2021, the SEC rejected VanEck’s previous Bitcoin ETF application due to concerns surrounding “fraud and manipulation” of the Bitcoin spot market.
The SEC has only approved futures-based Bitcoin ETFs, rejecting all spot market Bitcoin applications to cross its desk.
A spot market Bitcoin ETF provides exposure to Bitcoin, whereas the futures-based Bitcoin ETF is based on a Bitcoin futures contract. Futures-based ETFs are also typically more expensive than their spot market-based counterparts.
On Wednesday, the SEC rejected Grayscale’s Bitcoin ETF application after nearly eight months of prolonged delay. Following its rejection, Grayscale has moved to the court against SEC.
Cathie Wood’s Ark Invest and Bitwise have also faced rejections from the SEC for their Bitcoin ETF applications.
The SEC has only approved futures-based Bitcoin ETFs, rejecting all spot market Bitcoin applications to cross its desk.
A spot market Bitcoin ETF provides exposure to Bitcoin, whereas the futures-based Bitcoin ETF is based on a Bitcoin futures contract. Futures-based ETFs are also typically more expensive than their spot market-based counterparts.
On Wednesday, the SEC rejected Grayscale’s Bitcoin ETF application after nearly eight months of prolonged delay. Following its rejection, Grayscale has moved to the court against SEC.
Cathie Wood’s Ark Invest and Bitwise have also faced rejections from the SEC for their Bitcoin ETF applications.
To recover its peg to Bitcoin, Grayscale said the product should be converted into a spot market Bitcoin ETF.
This is because GBTC cannot be redeemed for underlying Bitcoin—if it could, traders would be rushing to buy the discounted GBTC and convert it to the real crypto, pocketing a large profit. Conversely, traditional ETFs are usually able to maintain their peg because they offer redemptions for the underlying assets.
SEC Commissioner Hester M. Pierce has also voiced support for the approval of spot market Bitcoin ETFs.
To recover its peg to Bitcoin, Grayscale said the product should be converted into a spot market Bitcoin ETF.
This is because GBTC cannot be redeemed for underlying Bitcoin—if it could, traders would be rushing to buy the discounted GBTC and convert it to the real crypto, pocketing a large profit. Conversely, traditional ETFs are usually able to maintain their peg because they offer redemptions for the underlying assets.
SEC Commissioner Hester M. Pierce has also voiced support for the approval of spot market Bitcoin ETFs.