It was a volatile day for the Bitcoin price, but an understated debut for VanEck’s Bitcoin futures ETF.
A bittersweet debut for VanEck’s Bitcoin futures ETF
The VanEck Bitcoin Strategy ETF (abbreviation: XBTF), was launched amid a sharp decline in Bitcoin. The price of the largest cryptocurrency fell more than 9% to below the $60,000 level within a day. On the same day, 38,398 BTC futures shares of VanEck were traded. The stock ended at $59.73, just below the $60.00 it opened at. According to VanEck, the ETF had $9.6 million in assets under management at the end.
It’s a bittersweet debut for VanEck, as the Bitcoin sports ETF application was denied by the SEC on Friday after the regulator raised lingering concerns about fraud and manipulation in the crypto market.
“Obviously we were disappointed to hear about the SEC’s decision on the physical product and we continue to view that as the superior product,” said Kyle DaCruz, director of digital asset products at VanEck.
While spot prices have to do with the real-time value of the Bitcoin, futures contracts are agreements to buy the BTC at a fixed price later, sometimes even months later. DaCruz added that while VanEck plans to continue working on bringing a spot product to market, it was unable to speculate on when that would happen.
For now, its Bitcoin futures ETF has two competitors to compete with.
The advantages of the VanEck ETF
The Proshares Bitcoin Strategy ETF, the first Bitcoin futures ETF to receive SEC approval, amassed a record $1.1 billion worth of avtiva in its first two trading days. The Valkyrie Bitcoin Strategy ETF, which launched three days later, has approximately $50 million under management.
DaCruz said the VanEck ETF has two advantages over its competitors: 1. Lower fees, charging 0.65 basis points compared to the 0.95 charged by BITO and BTF. 2. a C-Corp structure that allows losses to be carried forward. That means if the ETF ends the year with losses, they can be carried forward and deducted from the next year’s profits, meaning investors can use past losses to reduce the taxes they pay on future gains.