VanEck’s Bitcoin Futures ETF Ends Its First Day With $9.6 Million Management
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Answer VanEck’s Bitcoin Futures ETF Ends Its First Day With $9.6 Million Management
As expected, the VanEck Bitcoin Futures ETF (XBTF), which tracks the price of Bitcoin futures, was launched today amid market turmoil that saw the price of Bitcoin drop below $60,000 for the first time in two weeks.
Bitcoin price has recovered a bit, reaching $59,966 by the time traditional markets closed yesterday at 4pm ET.
At the time, VanEck’s XBTF fund saw 38,398 shares traded on its first day, closing at $59.73 per share, just under $60 per share.
According to For VanEck, the Bitcoin ETF had approximately $9.6 million in assets under management at close.
Arguably a bittersweet appearance for VanEck, the US Securities and Exchange Commission (SEC) refused to certify its spot bitcoin ETF on the market on Friday after the regulator cited persistent concerns about fraud and manipulation in the cryptocurrency market.Read:Binance is the biggest winner of the decision to lift the ban on cryptocurrencies in India
VanEck’s application has been waiting for a decision from the regulator since 2017.
Kyle D’Cruz, Director of Digital Asset Products at VanEck, said:
We were clearly disappointed to hear a decision on the spot product of the ETF and we continue to consider that product to be superior.
However, in light of this decision, we felt it was important and frankly excited to offer to the market Bitcoin-related exposure to investors in a regulated exchange-traded fund.
While spot prices have something to do with the real-time value of an asset, futures contracts are agreements to buy an asset later, sometimes months later, at a fixed price.
Dacrose added that VanEck plans to continue working towards an immediate market launch, but he cannot predict when that will happen.
Currently, the ETF Bitcoin futures contract VanEck has two competitors to contend with.
Proshares, the first Bitcoin futures ETF to receive SEC approval, raised $1.1 billion in its first two days of trading and has since settled at $1.05 billion.
Valkyrie’s Bitcoin ETF, which launched three days later, has about $50 million under management.Read:Bitcoin price outperforms gold by 100% this year
Dacrose said the VanEck ETF has two advantages over its peers:
Lower fees, as we charge 0.65 basis points compared to 0.95 charged by BITO and BTF, and a C-Corp structure that allows losses to be carried forward.
This means that if an ETF ends the year after incurring losses, it can be carried forward and deducted from the following year’s profits, which means investors can use past losses to reduce the taxes they pay on future gains.Read:The number of bitcoin addresses holding at least 1 bitcoin has risen to an all-time high
The ability to process losses and carry forward and backward is key in this asset class.
So when the fund is going through a downturn, there is nothing you can do with these losses.
But C-Corp can carry those losses forward five years into the future or three years back to offset the gains.
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