Application submitted for a Spot BNB ETF by VanEck; momentum builds for other altcoin funds
Say Hi to the First BNB Spot ETF in the U.S.!
VanEck, a leading financial management company, has dropped the bombshell by filing for a BNB (Binance's native cryptocurrency) ETF in the United States. This filing marks the first official attempt to list such a fund in the U.S.
The proposed ETF aims to track the price of BNB without requiring investors to own actual tokens. Here's what you need to know about this groundbreaking financial product:
ETF Structure and Operations
The ETF will store actual BNB tokens in custody and calculate its value from the aggregated prices across the top five trading platforms. MarketVector Indexes has been appointed as the index provider for this pricing mechanism.
The filing indicates that the ETF may engage in staking activities, subject to regulatory approval. If authorized, staking could generate extra BNB through vetted providers. Importantly, the ETF will forego airdrops, forked assets, and other incidental benefits linked to BNB.
Seed capital has already been secured. A private investor initially procured seed shares, which were later converted into ETF creation baskets based on BNB's index value at the time.
Trading and Ownership
Shares of the ETF will only be issued or redeemed in large units called "Baskets." These transactions will be managed by authorized financial institutions. Once issued, investors can buy or sell shares on secondary markets, though trading prices may deviate from the net asset value.
It's essential to note that the ETF is not registered under the Investment Company Act of 1940 and does not fall under the regulatory oversight of the Commodity Futures Trading Commission. Instead, it falls outside these regulatory purviews.
Risks and Rewards
Investing in the proposed ETF may involve considerable risks. BNB's price volatility could lead to substantial or total losses. Moreover, the ETF's shares will not be insured by the Federal Deposit Insurance Corporation or any other government entity.
A Leap for Altcoins on Wall Street
VanEck's move comes after establishing a legal entity for the ETF in Delaware. If successfully launched, the ETF will join the burgeoning trend of asset managers pushing for more altcoin-based investment products in the U.S.
Meanwhile, a BNB-based investment product is already available in Europe since 2019, provided by 21Shares on various European platforms.
Stay tuned for updates as VanEck's application navigates the U.S. Securities and Exchange Commission review process!
CNBC, BCB Crypto Market, VanEck
- VanEck, a leading financial management company, has filed for a BNB ETF in the United States, marking the first official attempt to list such a fund.
- The proposed ETF will store actual BNB tokens in custody and calculate its value from the aggregated prices across the top five trading platforms.
- The ETF may engage in staking activities, subject to regulatory approval, and could generate extra BNB through vetted providers.
- Shares of the ETF will be issued or redeemed in large units called "Baskets," and trading prices may deviate from the net asset value.
- The BNB ETF could represent a significant step for altcoins on Wall Street, following VanEck's move and the existence of a BNB-based investment product in Europe since 2019.
