VanEck and Bitwise said the two investment firms are seeding $72.5 million and $500,000, respectively, in Bitcoin ETFs, according to S-1 documents filed with the SEC on Monday.
Form S-1 discloses important information to financial regulators, such as a company’s business model, financial statements, details about management, and legal or competitive risks.
Seed capital refers to funds provided to launch an exchange traded fund (ETF). Although banks and broker-dealers often provide seed capital, ETFs can self-seed new capital or existing assets, as in this case.
Bitwise, which claims to be the largest cryptocurrency index fund manager in the United States, is offering a $200 million investment opportunity with investment firm Pantera Capital in addition to a $500,000 seed basket.
“Pantera Capital Management LP, through one or more affiliated investment funds, has expressed interest in purchasing up to $200 million of shares in this offering through accredited participants or broker-dealers in the market,” Bitwise said. “However, because an expression of interest is not a binding contract or commitment to purchase, these potential buyers may decide to purchase more, less or no shares.”
Founded in 1955, New York-based VanEck is a global investment and asset management firm focused on ETFs, mutual funds, and account management for institutional investors. According to VanEck, the company began developing ETF products in 2006.
In 2017, VanEck launched a Bitcoin futures ETF, but like others, he is not yet included in any Bitcoin ETF approved by the U.S. Securities and Exchange Commission. This week, things changed for the company and the cryptocurrency market.
Bitwise and VanEck’s applications are just two of several the SEC is reviewing this week. In December, Bitwise released a Bitcoin ETF ad featuring “the most interesting man in the world” Jonathan Goldsmith.
Although the cryptocurrency space sees ETFs as a moonshot opportunity for Bitcoin and potential Ethereum, Bitwise and VanEck warned investors in their respective filings about the potential risks of investing in Bitcoin ETFs. .
VanEck warned in the filing that the investment could go to zero.
“The value of Bbitcoin, and therefore the value of the Trust’s shares, could fall rapidly, including to zero. You could lose your entire investment,” VanEck said. “The shares are not insured or guaranteed by the Federal Deposit Insurance Corporation, any other government agency, or any other person or entity.”
“Representing a new and rapidly changing industry, the further development and acceptance of the Bitcoin network and other digital asset networks are influenced by a variety of factors that are difficult to assess,” Bitwise wrote. “Any slowdown or disruption in the development or adoption of the Bitcoin network could have a negative impact on your investment in the stock.”
SEC Chairman Gary Gensler warned investors about the potential risks of investing in cryptocurrencies in a post on Twitter on Monday.
“Investing in cryptocurrency assets can be very risky and often highly volatile,” Gensler said. “Many major platforms and cryptocurrency assets have gone bankrupt or lost value. Investments in cryptocurrency assets continue to be subject to significant risk.”
editor Ryan Ozawa.
