On 30th December 2020 Van Eck filed a new application with the SEC for a Bitcoin ETF. To what extent does the new asset class enable firms to compete with the Van Eck Bitcoin Trust by building their own Bitcoin product based on the new design?
Compelling Investor Benefits
The new asset design can be used to produce digital or traditional products. This means that it can create an exchange traded Bitcoin product that directly competes with traditional Mutual Funds and ETFs.
It can be used to package an S&P500 product, an Apple product, or any other market. For this example let us stay with Bitcoin.
As I write the Bitcoin is at $33,000.
GIVEN A CHOICE WHAT INVESTOR WOULD CHOOSE TO PAY $33,000 FOR BITCOIN WITH THE VAN ECK BITCOIN TRUST WHEN THEY CAN PARTICIPATE IN THE MARKET FOR JUST $330?
That is a price last seen in November 2013. Yet this is exactly the compelling benefit a Bitcoin product based on the new design offers investors. With the new design investors can participate in the price action of Bitcoin with the advantage of 100X gains built into the asset design.