A new filing with the U.S. Securities and Exchange Commission (SEC) indicates that investment firm VanEck Associates Corporation wants to offer a bitcoin futures mutual fund in the United States.
“The [Bitcoin Strategy] Fund seeks to achieve its investment objective by investing, under normal circumstances, in bitcoin futures contracts … as well as pooled investment vehicles and exchange-traded products that provide exposure to bitcoin,” per the filing. “The Fund does not invest in bitcoin or other digital assets directly.”
According to the filing, the fund will make its indirect bitcoin investments through a subsidiary and that investment could reach up to 25% of the value of the fund’s total assets. The subsidiary, a wholly-owned limited company based in the Cayman Islands, operates under the islands’ laws and can invest in bitcoin directly.
Additionally, the filing shows that the fund’s target exposure to bitcoin investments will be approximately 100% of the fund’s net assets. But it may rise above that level when the fund chooses to employ leveraged exposure in bitcoin.
If bitcoin investments don’t consume all of the fund’s net assets, it may resort to alternative investment vehicles to provide liquidity, serve as margin or collateralize the fund’s or the subsidiary’s investments. According to the filing, such alternative avenues include U.S. treasuries, money market funds, cash and cash equivalents, mortgage-backed securities issued or guaranteed by U.S. government agencies and even sovereign debt obligations of non-U.S. countries.
The Bitcoin Strategy Fund’s portfolio will be managed by Gregory Krenzer, who will be primarily responsible for the day-to-day portfolio management of the fund. Krenzer has been with VanEck since 1994 and has over 25 years of experience in financial markets.
This filing is not VanEck’s first related to bitcoin. The company filed for a bitcoin exchange-traded fund (ETF) with the SEC at the end of 2020, but its approval has recently been delayed.