Fund issuer plans to launch ETF based on cryptocurrency stocks
The U.S. market still lacks a dedicated Bitcoin ETF. When this will change is the subject of considerable debate, but for now, investors have other avenues to consider, including blockchain exchange-traded funds.
What happened: VanEck, a fund issuer with its sights set on a Bitcoin ETF, came up with another tip: the VanEck Vectors Digital Assets ETF. The issuer disclosed the fund’s plans in a recent SEC filing.
“Digital asset companies may include small and medium-sized companies as well as emerging market and foreign issuers, and ETFs may invest in depositary receipts and securities denominated in foreign currencies,” the document explains.
Why it matters: If a digital asset ETF goes public, it will track the MVIS Global Digital Asset Stock Index.
“In order to be initially eligible to be included in the index, a company must have at least 50% of its revenue from (I) digital asset projects or (ii) the potential to generate at least 50% of the digital asset industry’s revenue after development,” according to the document.
“Companies with less than 50% of their revenue from the global digital asset space, including semiconductor and online money transfer companies, can be added to the index to meet a minimum number of constituents. Index constituent weights are based on free float market capitalization, with individual constituents’ index weight is capped at 8%.”
Information on the index is still scarce, and no specific components are mentioned in the report.
Nonetheless, there are some memberships, including “persons who operate digital asset exchanges, payment platforms, mining operations, software services, equipment and technologies or services for the digital asset industry, digital asset infrastructure or facilitate interaction with digital assets. use, etc. They may also include companies that own a large amount of digital assets or generate revenue related to the operation of digital assets.”
What’s next? The document notes that there are risks in investing in the technology and financial services industries, suggesting that these groups can be found in new ETFs.
On the other hand, the filing does not include specifications for ticker symbols or fees, suggesting that the VanEck digital asset ETF will not launch anytime soon.