VanEck has announced the anticipated launch of the VanEck Bitcoin Strategy ETF (XBTF), an actively managed ETF that seeks capital appreciation by investing in standardised, cash-settled bitcoin futures contracts.
XBTF is expected to list on Cboe on November 16, 2021. XBTF comes to market as the lowest-cost bitcoin-linked ETF, with a net expense ratio 30 basis points (bps) lower than its next closest competitor, the firm writes, and has been structured as a C-Corp., an approach that may provide a more efficient tax experience for long-term investors.
XBTF is the first ETF in VanEck’s suite of US-listed funds to provide exposure to bitcoin futures and joins VanEck Inflation Allocation ETF (RAAX) in providing investors with bitcoin exposure. RAAX has held positions in other bitcoin-focused products since January 2021.
XBTF is actively managed by Greg Krenzer, Head of Active Trading for VanEck. Krenzer joined the firm in 1994 and has more than two decades of experience trading in a host of asset categories, including the futures space. The fund will invest primarily in bitcoin futures listed and traded on the CME, a category that has seen tremendous growth over the past three plus years. Average daily open interest in the CME’s bitcoin futures has increased from USD77 million in average daily open interest in Q1 2018 to approximately USD1.5 billion in Q3 2021.
“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,” says Kyle DaCruz, Director, Digital Assets Product with VanEck. “Cost and tax treatment are two essential considerations for investors, and we have made both front and centre in the design of XBTF. Investors deserve lower cost, transparent, regulated bitcoin exposures, and we’re pleased to be leading that charge with the launch of XBTF and all of our ongoing efforts in the bitcoin and digital assets space.”
XBTF is listed on Cboe and has a net expense ratio of 0.65 per cent. State Street will provide services including ETF basket operations, custody of the ETF shares, fund accounting, order-taking and act as the transfer agent.
“We’re excited to be working alongside VanEck on the launch of the XBTF ETF, says Nadine Chakar, head of State Street Digital. “Our newly launched division, State Street Digital, was created to help drive innovation and address the industry’s evolving shift to digital finance, and we continue to prioritize developing our servicing capabilities as part of our broader strategy for the crypto and digital assets environment. We are pleased to further develop our longstanding partnership with VanEck on this important fund launch.”
VanEck has long been a leader in the digital assets space and, led by CEO Jan van Eck, was the first asset manager to file an application to launch a bitcoin futures exchange traded product. The firm recognised in early 2017 that digital assets could provide a store of value alternative to existing currencies and gold, as well as technology solutions that may lower costs in the payments and financial investing industries.