VanEck has committed 72.5 million USD in seed capital for its ETF. Bitwise has committed 500,000 USD. These figures come from S-1 documents filed with the US Securities and Exchange Commission (SEC).
According to filings , Bitwise is offering a 200 million USD investment opportunity, with Pantera Capital among the potential buyers.
S-1 forms play a critical role in disclosing important information to financial regulators. This includes details about the company’s business model, financial statements, management team and associated risks.
Seeding, as mentioned in the documents, refers to providing funds to launch an ETF.
While banks and broker-dealers often provide seed capital, ETFs can also form themselves using new capital or existing assets.
Bitwise, known as the largest crypto index fund manager in America, offers an investment opportunity of $200 million in addition to the starting capital of 500,000 USD.
Pantera Capital Management LP has expressed interest in purchasing up to 200 USD million worth of Bitwise shares through its affiliated investment funds.
It is important to note that expressions of interest are not binding agreements. Potential buyers have the flexibility to adjust their investment amount.
Founded in 1955, VanEck is a New York-based global investment and asset management firm specializing in ETFs, mutual funds and institutional account management.
The company has been actively developing ETF products since 2006. In 2017, VanEck launched a Bitcoin (BTC) futures ETF. However, like many others, the company is awaiting SEC approval for a Bitcoin ETF on the ground.
Like the entire cryptocurrency market, VanEck is also hoping that the regulatory environment changes in his favor this week.
VanEck and Bitwise’s applications are among several currently under review by the SEC.
Bitwise even released a commercial featuring the “most interesting man in the world,” Jonathan Goldsmith, to promote its Bitcoin ETF.
Bitwise and VanEck warn of crypto risks in applications
While the cryptocurrency industry sees ETFs as potential game changers for Bitcoin and even Ethereum, both Bitwise and VanEck have warned investors about the risks associated with investing in Bitcoin ETFs.
VanEck specifically warns investors that the value of Bitcoin, and therefore the value of the trust’s shares, could decline quickly and potentially reach zero. The application emphasizes that investing in the ETF involves risks. Spot ETF shares are not insured or guaranteed by any government agency or entity. Bitwise makes a similar point, highlighting the difficulty of assessing the future development and adoption of the Bitcoin network and other digital asset networks that are part of a rapidly changing industry.
SEC Chairman Gary Gensler warned about the risks of cryptocurrency investing on Twitter on Monday. He emphasized that investing in crypto assets can be exceptionally risky and volatile, citing cases where major platforms and crypto assets became insolvent or lost value. Gensler reiterated that investing in crypto assets continues to pose significant risk.
1⃣ Those offering crypto asset investments/services may not be complying w/ applicable law, including federal securities laws. Investors in crypto asset securities should understand they may be deprived of key info & other important protections in connection w/ their investment.
— Gary Gensler (@GaryGensler) January 8, 2024
As reported, Bloomberg analysts are increasingly bullish on the approval of a Bitcoin ETF in the United States. The chances are now over 90%.
In a recent post, Bloomberg ETF analyst Eric Balchunas commented on the likelihood of the Securities and Exchange Commission (SEC) rejecting the proposals after a flurry of updated filings.
Balchunas said he would put the probability of rejection at just 5%, leaving a small possibility for such outcomes.
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