VanEck Is Finally Launching Its Bitcoin Futures ETF

Key takeaways

• VanEck’s Bitcoin Strategy ETF is set to launch tomorrow on the CBOE.
• The futures-based Bitcoin fund will be the “lowest cost” Bitcoin ETF yet. 
• Spot-settled Bitcoin ETFs are still the ultimate goal of the Bitcoin market. 

A new addition is being made to the number of Bitcoin futures exchange-traded funds on the market. Today, global investment manager, VanEck, announced that it would be launching its Bitcoin Strategy ETF tomorrow – November 16 – on the Chicago Board Options Exchange (CBOE) under the ticker symbol XBTF.

The ETF is a futures-based Bitcoin ETF as the official notice states. The notice describes the ETF as:

“…an actively managed ETF that seeks capital appreciation by investing in standardized, cash-settled bitcoin futures contracts.” 

It is being marketed by VanEck as the “lowest cost Bitcoin-linked ETF” that was designed to optimize tax efficiency for long-term investors. It will come to market with a net expense ratio 30 basis points lower than its “closest competitor.” 

The futures ETF offering is coming after the asset managers just dealt with a rejection of their proposed spot Bitcoin ETF by the SEC last week. The spot ETF, which was also supposed to trade on the CBOE, was rejected on grounds of not meeting the market manipulation prevention standards of the SEC.

SEC Only Open To Futures-Based Crypto ETFs

So far, the SEC remains open to only futures cryptocurrency ETFs for the U.S. market. VanEck’s futures ETF will join ProShares Bitcoin Strategy ETF (BITO) and Valkyrie Bitcoin Strategy ETF (BTF) which are also futures-based ETFs. 

BITO had a stellar performance on the back of its first-mover advantage and quickly crossed $1 billion in assets under management (AUM). It currently has around $1.6 billion in AUM according to data from Coinglass.

BTF however had a more muted launch but has gained some traction still and has over $51 million in AUM. It remains to be seen if a similar fate awaits VanEck’s offering in the days to come or if their low-cost offering will help them gain significant market share rapidly.

VanEck has also applied to launch a Bitcoin ETF that offers exposure to Bitcoin by tracking Bitcoin-focused companies. 

Market expectation for a spot-settled Bitcoin ETF is still high

There are still over 20 spot Bitcoin ETF applications with the SEC for both Bitcoin and Ethereum, the second-largest cryptocurrency by market cap. The next deadlines for decisions on spot Bitcoin ETFs are in December when Kyption’s and WisdomTree’s spot Bitcoin ETF applications are bound to know their status from the SEC. 

Spot Bitcoin ETFs are in high demand in the market. VanEck is also one of the asset managers eager to provide the offering to investors but is for now settling with what they can get.

“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,” they noted in their press release. 

However, several analysts including Bloomberg Eric Balchunas and James Seyffart have stated that a spot Bitcoin ETF may not be seen till next year. The ETF expert duo believes an Ethereum futures-based ETF may get approval before the spot-settled ETFs see the light of day.