VanEck Seeks to Launch Digital Asset Mining ETF
Proposed product comes after firm launched its bitcoin strategy ETF on Nov. 15.
Blockworks exclusive art by Axel Rangel
key takeaways
- The filing follows the SEC’s rejection of VanEck’s proposed spot bitcoin ETF last month and the firm’s launch of a bitcoin futures ETF the following week
- Fund would compete with range of products investing in bitcoin miners, such as Amplify Investments’ $1.7 billion Transformational Data Sharing ETF (BLOK)
Fund group VanEck filed with the US Securities and Exchange Commission (SEC) on Wednesday to launch an ETF focused on the crypto mining space.
The VanEck Digital Asset Mining ETF seeks to track the price and yield performance of the MVIS Global Digital Asset Mining Index, the disclosure states. The index includes companies that generate at least half of their revenue from digital assets mining activities or mining-related technology, or have projects that, when developed, have the potential to do so.
The fund would not invest in digital assets directly. The document did not indicate a ticker or expense ratio for the proposed fund.
A VanEck spokesperson did not immediately return Blockworks’ request for comment.
The SEC rejected the firm’s proposed bitcoin ETF, which would have invested in the crypto asset directly, last month just before the agency’s 240-day review period for the planned offering expired.
VanEck launched a bitcoin futures-based product – the VanEck Bitcoin Strategy ETF (XBTF) – the following week despite CEO Jan van Eck saying “a non-futures ETF structure is the superior approach.”
Though the ProShares Bitcoin Strategy ETF (BITO), the first such product to launch in the US, quickly ballooned to more than $1 billion assets under management, XBTF holds about $11 million after two weeks of trading.
VanEck’s new proposed product would compete with a growing number of crypto offerings that invest in the equity securities of blockchain companies, including bitcoin miners.
The largest such fund is Amplify Investments’ $1.7 billion Transformational Data Sharing ETF (BLOK), which launched in January 2018. Crypto miners within BLOK’s top 10 holdings include Hut 8 Mining, Riot Blockchain, Bitfarms, HIVE Blockchain Technologies and Marathon Digital, according to ETF.com data.
Other ETFs that invest in bitcoin miners have come to market this year, including the Bitwise Asset Management’s Crypto Industry Innovators ETF (BITQ) and Viridi Funds’ Cleaner Energy Crypto-Mining & Semiconductor ETF (RIGZ), which have about $130 million and $20 million assets under management, respectively.
Neena Mishra, director of ETF research for Zacks Investment Research, previously told Blockworks that though there has been a lot of focus on futures-based bitcoin ETFs, as well as when physically-backed bitcoin ETFs could be approved in the US, blockchain ETFs will likely remain relevant due to the vast landscape of crypto assets that investors may want exposure to.
“When gold does well, gold miners act as leveraged plays on the metal, and at that time we just see a lot of interest from investors in gold mining ETFs too because of the performance,” she noted, comparing gold to bitcoin.
VanEck’s largest ETF is its Gold Miners ETF (GDX), which launched in 2006 and manages nearly $14 billion in assets.
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