Leading asset management firm VanEck recently submitted an application for an Onchain Economy Exchange-Traded Fund (ETF), as disclosed in a filing with the US Securities and Exchange Commission (SEC) on Jan. 15.
The proposed Onchain Economy ETF is designed to offer exposure to the broader crypto ecosystem by investing in companies and instruments connected to digital assets. Unlike direct investments in cryptocurrencies, the fund aims to provide a diversified approach to the digital asset space.
This actively managed fund follows the model of existing crypto equity funds but introduces a new branding strategy. The fund plans to allocate at least 80% of its net assets to “Digital Transformation Companies” or digital asset instruments.
Digital Transformation Companies identified by VanEck include crypto exchanges, payment processors, blockchain miners, software providers, and companies involved in manufacturing crypto-related hardware or operating data centers. Additionally, businesses that hold digital assets or generate revenue from blockchain initiatives are also considered part of this group.
The fund’s scope extends to digital asset instruments such as commodity futures contracts, exchange-traded commodity products, swaps, and pooled vehicles, providing exposure to significant digital assets by market capitalization. However, stablecoins are excluded from the investment pool.
VanEck will utilize detailed market analysis to select investments, assessing companies based on their strategic positioning and emerging trends within the digital asset sector. The ETF includes a subsidiary based in the Cayman Islands to facilitate investments in specific digital asset instruments, ensuring compliance with US federal tax regulations that restrict direct investments by registered funds in certain financial products.
According to the filing, investments in this subsidiary will not exceed 25% of the fund’s total assets at the end of each quarter. VanEck’s innovative approach to the Onchain Economy ETF reflects its commitment to providing investors with exposure to the evolving digital asset landscape while adhering to regulatory requirements.
Overall, the Onchain Economy ETF represents a significant development in the crypto investment space, offering a unique opportunity for investors to participate in the digital asset ecosystem through a diversified and actively managed fund.