In this article we take a look at the European ETF by VanEck “Crypto And Blockchain Innovators” UCITS. Let’s see what it is composed of, what the management costs are, the performance, and the opportunities on the speculative level.
This type of ETF, as well as all other European funds that fall under the UCITS category, could see a strong inflow of assets in the coming months: the regulator ESMA is indeed requesting to add Bitcoin as an underlying asset of these investment products.
This is a huge potential if we consider that this type of European stock exchanges has an AUM of 12 trillion dollars.
Let’s see all the details below.
Summary
Cryptographic investments in Europe through ETF: VanEck Crypto and Blockchain Innovators UCITS
The VanEck Crypto and Blockchain Innovators UCITS ETF is a fund launched in April 2021 that invests in the drivers of blockchain transformation.
Let’s talk about an investment tool aimed at the European public, which nevertheless supports cryptographic activities worldwide and with the base currency USD.
The funds denominated UCITS (undertakings for the collective investment in transferable securities) actually represent regulated funds at the European level that can, however, also be traded abroad.
The Crypto and Blockchain Innovators di VanEck aims to incorporate those activities that use digital assets to transform the financial industry and other productive sectors.
Compared to other well-known and established ETFs like SPX, VWCE, and MSCI, it has a significantly smaller size with an AUM of 145 million dollars.
According to the platform JustETF, the management costs of the fund are quite high, with a TER of 0.65%.
The investment strategy follows accumulation, therefore all profits are reinvested in the product. The constituent parts of the ETF (holdings) are only 20, highlighting a low diversification compared to other funds that follow over 1000 parts.
The reference index is the MVIS Global Digital Assets Equity, while the provider is obviously VanEck, domiciled in Ireland.
At the moment the price of the fund is 8.19 EUR; up by 0.37% in the last 24 hours.
In the last year it has grown by 84%, reflecting a price performance similar to the benchmark Bitcoin. Since its launch in 2021, however, it has lost 43.83%, while Bitcoin from the same date is strongly in the bull with an X2 on prices.
Although with a limited history, we can observe how the ETF Crypto and Blockchain Innovators follows various moments of bull and bear.
In 2023, for example, it was the best performer with a performance of +291%, better than the 1,372 funds tracked by Bloomberg.
VanEck and its dominant position on digital assets
The VaneEck Crypto and Blockchain Innovators UCITS ETF represents an excellent means for European investors to gain exposure to cryptocurrencies through a regulated product.
The American company VanEck, expert in the issuance of exchange-traded funds, however, offers a wide range of instruments beyond the one just mentioned.
Among ETF and ETN it presents about 8 different methods to invest in certain sectors of the crypto and blockchain market, in addition to the spot Bitcoin HODL ETF.
Each fund focuses on a particular cryptocurrency, or replicates the trend of a specific industry.
The advantages of investing with these instruments are numerous: first of all, it allows speculative exposure without having to rely on unknown and unreliable third parties.
With the various VanEck ETFs, you can invest in specific companies such as miners, exchange groups, and other essential parts for the development of the sector.
The risks stem from the fact of utilizing a limited liquidity compared to the underlying assets and limited diversification. Added to this are the technological risks of a developing world.
Definitely if you want to buy Bitcoin and other coins it is more convenient to do it directly in the crypto market: you pay fewer fees and enjoy higher returns by buying from CEX and moving the funds to private wallets.
However, if one is not competent in this industry, VanEck funds are a good compromise for investing in security without missing too many opportunities.
It is also worth noting how VanEck also has private funds. Just yesterday, an insider of the company reported the victory of an award at the Global Digital Asset Awards 2024 by Hedgeweek.
The VanEck Digital Assets Alpha fund, available only to qualified purchasers, achieved the highest score both in returns and risks for the year 2023.
For this reason, it was awarded as the best directional fund and best performer of the year (long bias)
A great result for the fund manager VanEck, which strengthens its presence in the cryptocurrency territory.
The European regulator ESMA is considering adding Bitcoin to UCITS products
According to experts, the Vaneck Crypto and Blockchain UCITS ETF could attract a large amount of investment liquidity in the coming months.
This is because the European financial regulator ESMA is considering whether to include Bitcoin within UCITS products (those regulated in the Union):
After the SEC opened up to spot ETFs for crypto in January, European institutions now also want to offer their own contribution to the technology sector.
If the request were accepted by ESMA, we could celebrate a very important milestone for the crypto market. In fact, the UCITS markets are worth a total of 12 trillion dollars, about double the size of the US ETF market.
The news was first released on May 9, and it seems we are getting closer and closer to a final decision.
It is not yet clear, however, if the exposure of Bitcoin in UCITS ETFs will be futures or spot.
The parties interested in this novelty have until August 7 to express their opinions on the subject, indicating pros and cons.
Among these, ESMA has called to action all “investors and consumer groups interested in retail investment products.” Added to this are investment companies, management companies, UCITS depositaries, trade associations, and much more.
All the information related to this feedback request from the regulator is contained on this link.
We remember that in any case, if Bitcoin is added to the UCITS group, it will be a victory for the entire crypto sector.
In fact, the UCITS markets enjoy a reputation for stability and consistent returns, and represent 75% of all retail investor investments across the EU.
In particular, VanEck’s products, such as the “crypto and blockchain innovators,” would see strong buying pressure if the request were to pass officially.
The year 2024 could be remembered for a long time as the year of crypto regulation.
The real game-changer for the mass adoption of this technological sector.
