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On the heels of the SEC rejecting its proposal for a physical bitcoin ETF, VanEck today rolled out its own futures-based bitcoin ETF. The VanEck Bitcoin Strategy ETF (XBTF) is a lower-cost version of competitor funds launched by ProShares and Valkyrie.
XBTF comes with an expense ratio of 0.65%, undercutting the 0.95% charged by the current U.S.-listed bitcoin futures ETFs. It lists on Cboe Global Markets.
One thing to note is that XBTF is structured as a C corporation rather than a regulated investment company (RIC), which carries different tax implications. C-corps, unlike RICs, are taxed at the fund level, and of course, shareholders must also pay their own taxes on profits from their investments.
The fund is actively managed and reserves the right to invest in bitcoin-related companies it believes are closely tied to the price of bitcoin futures.
The first bitcoin futures ETFs launched in the last half of October, with the ProShares Bitcoin Strategy ETF (BITO) attracting $1 billion in assets in its first two days of trading. It was followed by the Valkyrie Bitcoin Strategy ETF (BTF), which had a far less dramatic debut and currently has just $60 million in assets under management.
Although it had the necessary permission to launch as of Oct. 23, VanEck delayed the launch of XBTF until after the SEC had rejected its proposal for a physical bitcoin ETF, with the regulator citing a lack of confidence that investors would be protected from volatility and price manipulation.
However, there are some concerns that new bitcoin futures ETFs will face difficulties gathering enough near-term futures contracts at a reasonable price given the demand from competitors BITO and BTF.
Contact Heather Bell at [email protected]