A Bitcoin ETF Coming To A Market Near You

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Bitcoin Liquidity

Is A Bitcoin ETF The Right Choice For You?

The buzz is now building and there could be a new bitcoin ETF effort launching by one of the market’s money management firms. The ETF that is being proposed will be tied to the price of bitcoin. New York-based VanEck is looking to create what it will call the “VanEck Vectors Bitcoin Strategy ETF”. Based on the SEC filings that were submitted, the main purpose of the ETF is to be listed on the Nasdaq stock exchange for trading.

Bitcoin Liquidity

Initial documentations that was released on August 11 shows that the fund will not necessarily invest directly into bitcoin itself. This is typically the case with other ETFs that are connected with the digital currency. VanEck aims to buy up positions in derivatives and other financial products that will offer exposure to market developments associated with bitcoin. Though the ETF focuses on bitcoin related products, it will not be solely limited to just bitcoin-tied securities. The fund also proposes to invest in United States Treasury bonds, money market funds, and cash.

The filing goes on to explain, “The Fund seeks to achieve its investment objective by investing, under normal circumstances, in U.S. exchange-traded bitcoin-linked derivative instruments (“Bitcoin Instruments”) and pooled investment vehicles and exchange-traded products that provide exposure to bitcoin (together with Bitcoin Instruments, “Bitcoin Investments.”

In March, the SEC had put the brakes on two other bids for an ETF dealing with cryptocurrency. One of which was brought from investors Cameron and Tyler Winklevoss. Whether the SEC will give the OK for this new ETF is still yet to be seen especially given the history of having ETF’s like this, shot down by the SEC.

In July, the US Commodity Futures Trading Commission granted a derivatives clearing organization license to startup LedgerX, and options exchange CBOE plans to launch such products later this year.

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