Bitcoin ETF: VanEck to Seed its ETF Product With Bitcoin

VanEck recently updated its Bitcoin ETF application with the US Securities and Exchange Commission (SEC). As a part of its update, the firm highlighted its plans to seed the BTC ETF with funds domiciled in physical BTC.

VanEck’s Bitcoin ETF Amendment

As reported earlier, VanEck refiled its Bitcoin ETF in a bid to align its approach to reflect the SEC’s core concerns. One of the important changes that accompanied the updated filing is that an unnamed seed capital investor bought Seed Creation Baskets for the VanEck Bitcoin Trust earlier this month.

This seed investment involves 50,000 worth of shares and was secured through Bitcoin. Though seeding an ETF product is not uncommon, it is worth noting that a related move has been made by BlackRock but the difference is that BlackRock’s iShares was seeded with cash.

While the permutations that the VanEck Bitcoin ETF as well as others are on track to be approved by the markets regulator, there is a need to exercise caution as advised by Scott Johnsson, a financial lawyer and General Partner at Van Buren Capital. 

Writing through X, Johnson underscored the similarities in the amendments made by VanEck and BlackRock, a move he identified is possible is not “too surprising given both issuers are represented by the same lawyers at Clifford Chance. Except here, instead of seeding with cash like iShares, Vaneck suggests they’ll seed with bitcoin.”

Is VanEck’s Filing Now Perfect?

Despite the affirmations to the positive updates in VanEck’s filing, Johnson also pointed out that while the Bitcoin seeding clause may be what the firm claims it is, there’s also a chance it is a result of “lazy lawyering.” In general, Johnsonn pointed out some undisclosed moves in the filing that VanEck chose to be silent about.

Nonetheless, the firm showcased how many factors will impact the value of its Bitcoin ETF including the decrease and increase in the supply of Bitcoin. Besides this, the broader market sentiment and how it impacts trading activities on exchanges was highlighted as well as the competition from other major investment products and services.

Whether or not the filing is perfect will be determined when the SEC gives its verdict, in hopes it will end the decade-long wait for the product.