The VanEck Bitcoin Strategy ETF will be listed on Cboe today.
It is an actively managed ETF that focuses on capital appreciation by investing in Bitcoin Futures contracts.
XBTF: how the VanEck Bitcoin Strategy ETF will work
XBTF is presented as the cheapest Bitcoin-linked ETF available in the US markets, with a net expense ratio 30 basis points lower than its nearest competitor.
However, it is still an ETF that is not based directly on BTC physically held by the fund, but on Futures contracts, like those launched last month.
Still, XBTF turns out to be the first actively managed Bitcoin ETF in the US markets. The fund is managed by Greg Krenzer, Head of Active Trading at VanEck.
Krenzer has more than 20 years of trading experience in various asset classes, including Futures contracts. The Fund will primarily invest in Bitcoin Futures traded on the CME.
XBTF has a net expense ratio of 0.65% and State Street will provide the fund with services such as basket transactions, share custody, accounting and order taking.
VanEck, Bitcoin pioneer
VanEck was the first asset manager to submit an application to launch a Bitcoin-based forward-traded product. The company has been working with crypto assets since 2017, and also produces a certain amount of research and analysis on the digital asset sector. It also already offers a range of ETPs on digital assets in Europe.
As of 31 October 2021, it managed approximately $82.2 billion in assets, including mutual funds, ETFs and institutional accounts.
VanEck’s director of Digital Assets Product, Kyle DaCruz, said:
“While a ‘physically backed’ bitcoin ETF remains a key goal, we are very pleased to be providing investors with this important tool as they build their digital asset portfolios. Cost and tax treatment are two essential considerations for investors, and we have made both front and center in the design of XBTF. Investors deserve lower cost, transparent, regulated bitcoin exposures, and we’re pleased to be leading that charge with the launch of XBTF and all of our ongoing efforts in the bitcoin and digital assets space”.
No ETF on physical Bitcoin
No sign of an ETF based on physical BTC yet. A possible approval by the SEC was expected on 14 November, but instead came yet another rejection.
ETFs based on physical BTC entail more difficulties and risks, particularly with regard to custody, and must comply with different and more stringent regulations than those based on Futures contracts.
According to some experts, it will take at least until spring 2022 for the SEC to agree to approve one.