VanEck Seeks SEC Approval for New ETF Focused on Crypto Firms

Asset management firm VanEck has filed for approval with the US Securities and Exchange Commission (SEC) to launch its “On-chain Economy” Exchange-Traded Fund (ETF). 

The fund aims to invest primarily in companies and instruments related to the crypto sector without directly investing in cryptocurrencies.

New VanEck ETF Plans to Avoid Direct Crypto Holdings

According to a January 15 filing, the fund will allocate at least 80% of its net assets to “Digital Transformation Companies” and “Digital Asset Instruments.” 

VanEck explained that digital transformation companies operate in areas such as crypto exchanges, payment gateways, crypto mining, or infrastructure related to these activities. These companies may also include those that hold significant crypto assets or generate revenue from digital asset projects. 

Meanwhile, Digital Asset Instruments refer to financial products like commodity futures, options, and other exchange-traded products that provide exposure to crypto.

“The Fund does not invest in digital assets or commodities directly,” the company said in the filing.

Nevertheless, the firm has filed for other crypto ETFs in recent months. In November, VanEck filed a proposal with the Chicago Board Options Exchange to introduce Solana ETFs following earlier applications with the SEC. 

However, in September last year, VanEck shut down its Ethereum futures ETF. The reason could be that, in contrast to their Bitcoin counterparts, Ethereum-based ETFs have consistently underperformed.

VanEck’s head of digital assets research, Matthew Sigel, first announced the new ETF in a now-deleted X post.

“Deleted a post on an ETF filing. Details coming soon,” Sigel posted later.

The on-chain economy fund will target companies with substantial revenue exposure to digital asset projects or large holdings of digital assets, selecting them through a mix of fundamental analysis and market trends.

Another fund similar to VanEck’s on-chain economy fund is Bitwise’s “Bitcoin Standard Corporations ETF.” This fund will only invest in companies that hold substantial amounts of Bitcoin as part of their corporate financial reserves.

VanEck’s new fund will also invest in digital asset instruments through a subsidiary based in the Cayman Islands. This will help the fund comply with US tax regulations while gaining exposure to these instruments.

“The Fund’s investment in the Subsidiary will generally not exceed 25% of the value of the Fund’s total assets at each quarter-end of the Fund’s fiscal year,” VanEck said in the filing.

The VanEck filing comes as the SEC recently postponed its decision on Bitwise’s 10 Crypto Index ETF to March. The regulator said more time is needed to conduct the review.