VanEck, a renowned investment management firm, has recently submitted an application to the U.S. Securities and Exchange Commission (SEC) with the intention of launching an exchange-traded fund (ETF) that will track the performance of companies involved in the on-chain economy. The proposed ETF, named the VanEck On-Chain Economy ETF, will not invest directly in cryptocurrencies but will track companies that are significantly engaged in blockchain technology and the digital assets ecosystem.
According to the filing document, the ETF will focus on companies that generate a minimum of 50% of their revenues from on-chain economy activities or have a stated intent to invest at least 50% of their assets in such activities. These activities may include cryptocurrency mining, blockchain technology development, cryptocurrency trading services, digital asset mining hardware manufacturing, and other related operations.
The ETF, if approved, will offer investors a new avenue to gain exposure to the rapidly growing digital asset sector without directly investing in cryptocurrencies. This indirect investment approach mitigates the risk associated with the high volatility of cryptocurrencies. Additionally, it allows investors to profit from the growth of the blockchain industry and companies benefiting from the on-chain economy.
The approval of the ETF will be a significant milestone as it will be the first of its kind focusing on the on-chain economy. However, the SEC has typically been wary of approving cryptocurrency-related ETFs due to concerns of market manipulation and insufficient market surveillance. Despite the challenges, the application represents a significant step towards increasing mainstream institutional adoption of digital assets and blockchain technology.
VanEck has been at the forefront of introducing innovative financial products. The firm has previously submitted several applications for cryptocurrency ETFs. While they have yet to receive approval from the SEC, their persistence signifies their belief in the potential of the digital assets market and the role of blockchain technology in the future economy.
This latest proposal from VanEck showcases the firm's continuous efforts to bridge the gap between traditional finance and the emerging digital asset sector, and could pave the way for increased institutional investment in the blockchain economy.