VanEck, one of the leading asset management firms in the US, has announced that it has purchased $72.5 million worth of Bitcoin to seed its newly launched Bitcoin exchange-traded fund (ETF). The VanEck Bitcoin Trust, which began trading on the Nasdaq on January 5, is the first Bitcoin ETF in the US to receive approval from the Securities and Exchange Commission (SEC).
The Bitcoin ETF is designed to provide investors with exposure to the price performance of Bitcoin without the hassle of buying, storing, and securing the cryptocurrency themselves. The trust holds Bitcoin in cold storage with a qualified custodian and tracks the performance of the MVIS CryptoCompare Bitcoin Benchmark Rate, a real-time reference rate for the price of Bitcoin.
According to a filing with the SEC, VanEck bought 3,751.7 Bitcoins at an average price of $19,316.76 per coin on January 4, the day before the ETF launched. The total value of the trust’s assets as of January 5 was $74.1 million, which includes $1.6 million in cash and other receivables.
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VanEck’s move is a significant milestone for the Bitcoin industry, as it marks the first time that a major US asset manager has launched a Bitcoin ETF. The firm has been one of the most persistent advocates for a Bitcoin ETF, having filed multiple applications with the SEC since 2017. VanEck’s latest proposal, filed in December 2020, was approved by the SEC in November 2021 after a lengthy review process.
Grayscale, the world’s largest digital asset manager, had filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) for its alleged arbitrary and capricious treatment of bitcoin and other cryptocurrencies. The lawsuit challenges the SEC’s denial of Grayscale’s application to launch a spot bitcoin exchange-traded fund (ETF), which would allow investors to buy and sell bitcoin directly on a regulated platform.
Grayscale argues that the SEC has applied inconsistent and unreasonable standards to crypto-related products, while approving similar products for other asset classes. The lawsuit also claims that the SEC has violated the Administrative Procedure Act, the Investment Company Act, and the Constitution by acting in an arbitrary and capricious manner.
The lawsuit comes at a time when the SEC is facing increasing pressure from the crypto industry and lawmakers to provide clear and consistent guidance on how it regulates digital assets. Many observers believe that the SEC’s stance on crypto is outdated and inconsistent with the innovation and growth of the sector.
The SEC has repeatedly rejected applications for spot bitcoin ETFs, citing concerns over market manipulation, custody, and investor protection. However, the SEC has approved several futures-based bitcoin ETFs, which track the price of bitcoin through derivatives contracts rather than holding the underlying asset. The SEC has also approved ETFs for other asset classes that face similar or greater risks than crypto, such as gold, oil, and foreign currencies.
Grayscale’s lawsuit could have significant implications for the future of crypto regulation in the U.S. If Grayscale wins the case, it could pave the way for more spot bitcoin ETFs to be approved.
The approval of VanEck’s Bitcoin ETF has also sparked hopes that more Bitcoin ETFs will follow suit in the near future. Several other firms, including Fidelity, WisdomTree, and have also filed applications for Bitcoin ETFs with the SEC, but are still awaiting approval. Analysts believe that the launch of more Bitcoin ETFs will increase the liquidity, accessibility, and adoption of Bitcoin among institutional and retail investors, as well as boost its price and market capitalization.