VanEck has acquired regulatory authorization to release its ETF (Exchange-Traded Fund) of Bitcoin Futures in the next week, as shown in an SEC’s post-effective filing. The firm is the newcomer in the competition of the Bitcoin-connected ETFs within the United States, with obtaining the approval for contesting with the offering of ProShares, having begun the trading from yesterday. The permission has been given to the BTC Strategy ETF of VanEck on behalf of the SEC (Securities and Exchange Commission) of the U.S. to start trading after 23rd October with the ticker symbol “XBTF,” signifying that the fund will expectedly go public on 25th October in the next week.
The fund is known to be an effectively organized ETF that pursues to accomplish its investment target via investing, under usual situations, in the contracts of Bitcoin futures which are regular and cash-settled, to be traded over the commodity exchanges such as the CME (Chicago Mercantile Exchange) which have registered with the CFTC (Commodity Futures Trading Commission). No direct investment is made by the fund in the digital assets, including Bitcoin. Yesterday, the SEC permitted the open release of the earliest ETF associated with Bitcoin across the United States.
The Bitcoin Strategy ETF of ProShares initiated its trading on recent Tuesday with collecting more than $1B in the volume of trade and obtained the position of being the second biggest ETF launch throughout the U.S. markets’ history. Though none of the ProShares ETF or VanEck ETF will contain the real Bitcoin, they look for providing exposure of Bitcoin to the concerned investors through these futures contracts. The purpose of an ETF is generally to make it convenient for institutional and retail investors to get the original asset’s exposure regardless of having the straightforward custody or purchase of the respective asset.
Nonetheless, in this respect, a few tradeoffs are introduced regarding which the investors are required to have a complete understanding. Firstly, it indicates that the investors buying the ETF shares of Bitcoin futures will not, in any case, be capable of holding the real BTC. This scenario is likely to appear unique for a smaller amount of investors. Nevertheless, it is significantly important when seen in the perspective of the future where BTC can reach its objective by taking the place of the present financial system.