VanEck Files For Onchain Economy ETF Targeting Crypto Infrastructure

By: Isha Das

VanEck, a prominent asset management firm, has initiated the process to launch a new Exchange-Traded Fund (ETF) dubbed the Onchain Economy ETF. According to recent filings with the United States Securities and Exchange Commission (SEC), this ETF seeks to provide investors with access to the broader crypto infrastructure without directly investing in the cryptocurrencies themselves. The proposed fund is part of VanEck's broader strategy to capitalize on the growing digital economy.

The Onchain Economy ETF is designed to be an actively managed fund that builds on existing models of crypto equity funds while introducing a new branding strategy. The filing notes that the ETF plans to invest at least 80% of its net assets into entities known as "Digital Transformation Companies." These companies are integral to the digital asset ecosystem, encompassing a diverse range of stakeholders such as crypto exchanges, payment processors, blockchain miners, software developers, and manufacturers of crypto-related hardware.

Additionally, the fund plans to invest in digital asset instruments, offering indirect exposure to major digital assets by market capitalization through vehicles like commodity futures contracts and exchange-traded commodity products, but intentionally excludes stablecoins from its portfolio. The ETF will further engage in transformative investment themes by utilizing a Cayman Islands-based subsidiary, a structure that supports compliance with US federal tax regulations, promoting efficient fund operations.

VanEck emphasizes detailed market analysis as the core of its investment selection process. The firm intends to evaluate companies based on their strategic positioning and response to emerging trends within the digital asset landscape. The subsidiary in the Cayman Islands is expected to facilitate these investments, with the regulation stipulating a cap of 25% on total quarterly assets channeled through this entity. This innovative approach marks a significant step in integrating traditional financial models with emerging blockchain technologies while adhering to regulatory requirements.