In its recent amendment to the Bitcoin ETF application submitted to the US Securities and Exchange Commission (SEC), VanEck disclosed its plans to seed the ETF with physical Bitcoin. This move is part of VanEck’s effort to align its application with the SEC’s core concerns and enhance its chances of approval.
Seed Capital Investment: A Noteworthy Step
One significant development accompanying the updated filing is the involvement of an unnamed seed capital investor who purchased Seed Creation Baskets for the VanEck Bitcoin Trust. This investment, valued at $50,000, was secured using Bitcoin.
While seeding an ETF with capital is not unusual, what sets this apart is the use of physical Bitcoin. It’s worth noting that BlackRock made a similar move, but they seeded their iShares ETF with cash.
Caution Advised by Financial Lawyer
Scott Johnsson, a financial lawyer and General Partner at Van Buren Capital, advises caution despite the positive updates in VanEck’s filing. He points out that while the Bitcoin seeding clause might be as VanEck claims, there’s a possibility it’s the result of “lazy lawyering.”
Furthermore, VanEck has opted not to disclose certain aspects in the filing.
Factors Impacting VanEck’s Bitcoin ETF Value
VanEck’s amended filing highlights various factors that will affect the value of its Bitcoin ETF. These factors include fluctuations in the supply of Bitcoin, market sentiment, trading activity on exchanges, along with competition from other major investment products and services.
Is VanEck’s Filing Perfect? SEC’s Verdict Awaits
The SEC’s verdict will ultimately also determine the perfection of VanEck’s filing. The hope is that this development will bring an end to the decade-long wait for a Bitcoin ETF.