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VanEck’s Innovative Seeding Strategy Highlighted as Spot Bitcoin ETF Application is Amended

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“VanEck’s amended spot Bitcoin ETF application showcases their innovative approach to market entry, signaling a unique seeding strategy that could disrupt the traditional investment landscape.”

VanEck has taken another step towards securing approval for a Bitcoin exchange-traded fund (ETF) by filing an amended application with the U.S. Securities and Exchange Commission (SEC). One interesting detail in the filing is the revelation that an undisclosed seed capital investor purchased Seed Creation Baskets for the VanEck Bitcoin Trust in October. These baskets consist of 50,000 shares of the proposed ETF and were bought using Bitcoin. The valuation of these Bitcoin holdings was determined by the MarketVector Bitcoin Benchmark Rate.

Scott Johnsson, a financial lawyer and general partner at Van Buren Capital, pointed out on Twitter that VanEck’s amended filing uses similar language to the recently modified filing by Blackrock for a spot Bitcoin ETF. This is not surprising, as both issuers are represented by the same lawyers at Clifford Chance.

Unlike Blackrock’s filing, VanEck’s filing suggests that it will directly incorporate Bitcoin instead of seeding with cash. However, Johnsson advises caution in reading too much into this, as it could simply be lazy lawyering or an indicative addition.

VanEck is not the only firm making amendments to its application for a spot Bitcoin ETF. Bitwise Asset Management filed an amendment to its application in September, while ARK Invest, 21Shares, and BlackRock have also submitted amended filings. A spot Bitcoin ETF allows investors to gain exposure to the actual price of Bitcoin without owning it directly, making it more appealing to traditional investors. However, the SEC has repeatedly delayed or rejected the approval of spot Bitcoin ETFs due to concerns about market manipulation and investor protection.

In conclusion, VanEck’s amended filing is another significant development in the pursuit of a Bitcoin ETF. The inclusion of an undisclosed seed capital investor and the decision to directly incorporate Bitcoin are notable aspects of the filing. However, it remains to be seen whether the SEC will approve the application, considering the regulatory concerns surrounding spot Bitcoin ETFs.

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