According to a filing published today by the United States’ Securities and Exchange Commission, New York-based investment management firm VanEck intends to launch a Digital Assets ETF, one that will track as closely as possible, before fees and expenses, “the price and yield performance of the MVIS® Global Digital Assets Equity Index.”
The fund will invest in companies that generate at least 50% of their revenue from digital asset projects, or developing projects that have the potential to generate half of their revenue from the digital assets industry.
It should be noted, however, that the term “digital asset industry” is by and large a broad terminology for companies that operate digital asset exchanges, payment gateways, mining operations, software services, equipment, and technology. This may well mean that there is potential for companies like Coinbase to be included in the fund after a successful IPO.
The SEC filing also notes that this fund will invest in companies that hold a significant amount of digital assets on their balance sheets. This suggests that companies like MicroStrategy may be a part of its portfolio, considering its own billion-dollar Bitcoin holdings.
The New York-based investment firm isn’t a stranger to SEC filings. VanEck had previously submitted applications for Bitcoin-based ETFs with the SEC, with a majority of them being rejected by the regulatory agency for a host of reasons.
On the contrary, back in September 2019, VanEck withdrew its application for a Bitcoin ETF. Interestingly, the verdict on its most recent application for an ETF, titled “VANECK BITCOIN TRUST” is still undecided.
If the development comes to pass, it will be a huge step, especially since the said offering will be launching in a country where regulatory agencies have often been seen with a suspicious eye. In Europe, on the other hand, crypto-ETPs surpassed a billion Euros in assets in 2020, despite a regulatory ban on selling these products to retail investors in the U.K.
While a crypto-ETF is still yet to be officially approved in the U.S, many investment advisors have cited concerns saying that without a crypto exchange-traded fund, there is little incentive for registered investment advisors to put clients’ cash into crypto.