VanEck buys 1,640 BTC for $72.5M to seed ETF, holdings up over $1M before trading VanEck buys 1,640 BTC for $72.5M to seed ETF, holdings up over $1M before trading
VanEck's filing showed that the company purchased Bitcoin worth $72.5 million on Jan. 5, which equates to 1,450,000 shares at a per-share price of $50.00.
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Updated: Jan. 8, 2024 at 7:13 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
VanEck is heating up the competition by seeding its potential spot Bitcoin exchange-traded fund (ETF) with a substantial $72.5 million, according to the amended S-1 form filed on Jan. 8.
The move is part of a broader strategy among various asset managers who are vying for the attention of investors through competitive fee structures and strategic investments.
VanEck buys 1,640 BTC
VanEck’s filing showed that the company purchased Bitcoin worth $72.5 million on Jan. 5, which equates to 1,450,000 shares at a per-share price of $50.00. In total, the trust received 1,640.92489329 Bitcoin.
These Seed Creation Baskets were delivered on Jan. 5. The fund’s BTC holdings are worth $73.8 million as of press time on Jan. 8.
Additionally, Bitwise‘s amended S-1 filing on the same day revealed that Pantera Capital is the investor behind its $200 million seed fund. Bitwise itself has put up $500,000 for its proposed ETF with $500,000. Pantera’s commitment is not binding and is contingent on the SEC’s approval of the ETF.
Meanwhile, BlackRock and Fidelity have announced significantly smaller $10 million and $20 million seed funds for their respective ETFs. BlackRock purchased 227.9 BTC on Jan. 5, according to its latest filing. It is unclear whether Fidelity has also purchased the Bitcoin for its ETF.
In comparison, the high amounts of BTC VanEck and Bitwise put forth are a precursor to fierce competition between these fund managers once these products launch.
Competition heating up
The competitive nature of the ETF landscape is further evident in the diverse fee structures proposed by various firms.
Ark Invest and 21 Shares announced today that they have cut their fees from 0.8% to 0.25%, additionally offering a waiver on these fees for the first six months or until the first $1 billion is reached. Similarly, VanEck has also set its fee at 0.25%.
In a different approach, BlackRock has introduced a fee structure that begins at 0.2% for the first 12 months or for the initial $5 billion in its exchange-traded fund (ETF), after which it will rise to 0.3%.
Meanwhile, Bitwise is implementing a no-fee policy for its first six months before transitioning to a 0.24% fee. Other asset managers, including Wisdomtree, Invesco Galaxy, Fidelity, Valkyrie, Hashdex, and Franklin Templeton, have fees ranging from 0.39% to 0.9%.
Grayscale currently has the highest fee at 2% but plans to reduce it to 1.5%, according to its amended S-1 filing.
These varied fee offerings reflect each firm’s strategy to attract investors in a market increasingly acknowledging cryptocurrencies as a legitimate and attractive asset class.
Approval of these spot Bitcoin ETFs could herald a new era of mainstream crypto investment, offering a regulated investment vehicle that aligns with traditional asset classes. This would likely attract institutional and retail investors, funneling billions of dollars into digital assets and possibly driving higher prices.
However, it’s important to note that the approval of these ETFs is not guaranteed. The SEC has historically been cautious about cryptocurrency-related products, citing concerns about market risks such as fraud and manipulation. Yet, the changing regulatory climate and increased interest from major financial players suggest that approval may be on the horizon.
Mentioned in this article
Bitcoin 
VanEck 
Bitwise 
BlackRock 
Fidelity Investments 
Ark Invest 
21shares 
WisdomTree 
Franklin Templeton 
Valkyrie Author 
Assad Jafri
AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.
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In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
VanEck
VanEck is a global investment manager with offices around the world, including New York, Australia, China, Germany, Netherlands and Switzerland.
Bitwise
Bitwise Asset Management pioneered the first cryptocurrency index fund and is the leading provider of rules-based exposure to the cryptoasset space..
BlackRock
BlackRock, synonymous with global asset management, is an American multinational investment management corporation based in New York City.
Fidelity Investments
Fidelity Investments Inc., commonly referred to as Fidelity, is a multinational financial services corporation based in Boston, Massachusetts.
Ark Invest
ARK Investment Management LLC (ARK Invest) holds a precision lens on thematic investing.
21shares
21Shares is a Swiss provider of crypto- currency exchange-traded products (ETPs).
WisdomTree
WisdomTree is a global financial innovator, offering a well-diversified suite of exchange-traded products (ETPs), models, and solutions.
Franklin Templeton
Franklin Resources, Inc., commonly known as Franklin Templeton, stands as an American multinational holding company rooted in the world of finance.
Valkyrie
Valkyrie Investments is a specialized alternative asset management firm at the intersection of traditional finance and the emerging digital asset sector which is headquartered in Nashville.