Tag: Vaneck

Ethereum’s Potential Surge: VanEck Predicts ETH Value to Reach $11.8k by 2030 Amid Booming Smart Contract Adoption

by Blockchain News

In a recent report, investment management firm VanEck predicts that the Ethereum (ETH) token price could surge to $11,800 by 2030. The forecast is grounded on the revised valuation model estimating that Ethereum’s network revenues will significantly rise from the current $2.6 billion annually to $51 billion by the end of this decade, assuming Ethereum retains a 70% market share among smart contract protocols.

This report’s valuation methodology hinges on the projection of future cash flows. These projections factor in estimated Ethereum revenues, a global tax rate, and a share of the revenue for validators. The cash flow yield is set at 7%, with a 4% long-term crypto growth rate. This results in a fully diluted valuation (FDV) of Ethereum, which is then discounted by 12% to provide an estimate of Ethereum’s current value.

Ethereum’s revenues stem from transaction fees and Miner Extractable Value (MEV). Users bear these costs for using services on the Ethereum blockchain, with a part of these transaction costs allocated to validators and the rest being income for Ethereum. Moreover, Ethereum’s “Security as a Service” (SaaS) model is also highlighted as a potential revenue stream, enabling the securing of external applications, protocols, and ecosystems.

The report also analyzes the potential of various economic sectors, such as Finance, Banking, Payments (FBP), Metaverse, Social and Gaming (MSG), and Infrastructure (I), shifting their activities onto smart contract platforms. Current trends suggest that businesses might cover transaction fees to simplify the user experience, a practice that would mirror traditional business models.

VanEck’s report points out the crucial role of MEV in blockchain security due to its high value and considers Layer 2 (L2) solutions as the future of Ethereum transaction execution, despite the potential competition from numerous L2 chains.

However, the report also acknowledges the uncertainties around Ethereum’s future, reflected in the use of a 12% discount rate in its valuation model. 

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SEC Rejects VanEck Spot Bitcoin Trust Proposal

by Blockchain News

The United States Securities and Exchange Commission has denied a proposal by investment manager VanEck for the creation of a spot Bitcoin trust, a financial product that would allow investors to trade Bitcoin on regulated exchanges. This marks the latest instance of the SEC denying every application for a spot Bitcoin trust, with almost 20 such applications having been filed over the last six years.

In a statement, SEC Commissioners Mark Uyeda and Hester Peirce criticized the Commission’s decision and alleged that it was using a different set of criteria to evaluate spot Bitcoin trusts as compared to other commodity-based exchange-traded products (ETPs). The statement reads, “In our view, the Commission is using a different set of goalposts from those it used—and still uses—for other types of commodity-based ETPs to keep these spot bitcoin ETPs off the exchanges we regulate.”

The SEC’s decision comes amidst increasing institutional interest in Bitcoin and cryptocurrency investments, with Bitcoin recently reaching all-time highs in price. However, the SEC has been hesitant to approve financial products based on cryptocurrencies due to concerns about market manipulation, volatility, and fraud.

The proposed spot Bitcoin trust would have allowed investors to trade Bitcoin on regulated exchanges, providing greater accessibility to the cryptocurrency market. However, the SEC’s decision means that investors will continue to be limited in their ability to invest in Bitcoin through regulated channels.

VanEck had previously attempted to launch a Bitcoin ETF (exchange-traded fund) in 2017 but withdrew its application after facing resistance from the SEC. The investment manager had hoped that its proposal for a spot Bitcoin trust, which would have required less regulatory approval than an ETF, would have been more successful.

Despite the SEC’s decision, Bitcoin and other cryptocurrencies remain popular investments among retail and institutional investors. However, the lack of regulatory oversight and potential for market manipulation in the cryptocurrency market continues to be a concern for regulators and investors alike. The denial of VanEck’s proposal for a spot Bitcoin trust highlights the ongoing debate over how best to regulate and integrate cryptocurrency investments into traditional financial systems.

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VanEck Grants $35m Investments from Two Fairfax County Funds

by Blockchain News

VanEck, a global investment manager that provides Exchange Traded Fund and Mutual Funds, has announced that it has granted a $35 million investment from Fairfax County in Virginia. 

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The asset manager revealed that the investment was from two of Fairfax County’s retirement systems, including the Fairfax County Employees’ Retirement System and the Fairfax County Police Officers Retirement System respectively.

According to the announcement, Fairfax County may still be injecting additional cash in the near future as the investment was described as the initial tranche of commitment into the VanEck New Finance Income Fund, LP.

Fairfax County’s interest in investing in the VanEck New Finance Income Fund shows that the current crypto winter is not impacting the overall trust in the potential of digital currencies by institutional investors. 

The New Finance Income Fund, according to VanEck, was established back in December 2021 and is “designed to seek income opportunities for investors via short-term lending arrangements with digital assets entities through a simplified approach that alleviates the operational burden of direct digital assets lending.”

The asset manager said the fund is only available to institutional investors and takes away the hurdles associated when investors choose to invest in the nascent asset class themselves directly.

VanEck is a major player in the crypto ETF scene that has been making a valid case for institutional investors to wade into the crypto ecosystem. The firm comes off as one of the first organizations that started lobbying the United States Securities and Exchange Commission (SEC) to approve a spot Bitcoin ETF. 

While VanEck has quite a number of Bitcoin ETF rejections from the SEC, the firm was ranked as the second to win the regulator’s approval to establish a Bitcoin Futures ETF product in the US after ProShares last year. The company’s products are diversified and have products tracking Bitcoin mining.

Image source: Shutterstock

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VanEck to Launch Community NFT Collection

by Blockchain News

VanEck, one of the few American asset managers that have a Bitcoin futures Exchange Traded Fund (ETF) product, has announced the launch of its Community NFT Collection.

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The firm said the NFT collection is the first of its kind for any asset manager globally and that it will be resident on the Ethereum blockchain network.

The Community NFT Collection, a collection of 1,000 uniquely built digital currencies, was floated in conjunction with South Korean-based startup NOMOMO and was designed as a membership card for the few lucky individuals who will lay their hands on them.

“We’ve designed the VanEck Community NFT to function as a digital membership card, providing NFT holders with exclusive access to a wide range of events, digital asset research, and the insights of an inclusive community of digital assets enthusiasts and investors,” said Matthew Bartlett, VanEck Community NFT Co-Founder.

The NFT collection is symbolic as it will tell the story of finance, drawing insight from the past, evaluating the present, and projecting an ambitious run for the future. With Hammy, modelled after Alexander Hamilton, as its theme personality, the VanEck Community NFT is divided into three unique categories, including commons (which will total 750), rare (approximately 230), and legendary (approximately 20).

The NFT collection will be airdropped to the first 1,000 individuals that register on the project’s portal page starting this week. The VanEck NFT showcases the growing popularity of digital art and collectables, which has been taken to a whole new level by prestigious collections like the Bored Ape Yacht Club (BAYC), and CryptoPunks, amongst others.

Besides VanEck, other major players in the investment and banking world have also waded into the growing NFT world. From KPMG in Canada, which acquired a World of Women (WoW) NFT to identify with the ideology of the entire collection, to Dolce & Gabbana, which has floated its own exclusive NFT collection, the embrace of NFTs by multinational firms is arguably going mainstream today.

Image source: Shutterstock

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VanEck launches its first multi-token cryptocurrency fund

by Cointelegraph

On Monday, VanEck, a financial institution with close to $82 billion in assets under management with exchange-traded funds, or ETFs, mutual funds, and institutional accounts, announced the launch of its first cryptocurrency fund. The fund is listed as an exchange-traded note, or ETN, on the Deutsche Borse Xetra and SIX Swiss Exchanges with exposure to Bitcoin (BTC), Ethereum (ETH), Polkadot (DOT), Solana (SOL), Tron, Avalanche (AVAX), and Polygon (MATIC).

Gijs Koning, co-head of VanEck Europe, elaborated on why it was important for the firm to facilitate investment in digital currencies:

In early 2017, we determined that digital assets could provide a store of value alternative to currencies and gold, as well as a host of technology solutions that could bring down costs in the payments and investing industries.

While VanEck’s cryptocurrency financial products are gaining traction in Europe, they face regulatory hurdles in the U.S. There, the firm’s offerings are limited to private digital currency funds for institutional investors and only stock-based ETFs comprised of companies utilizing blockchain technology.

Last November, the U.S. Securities and Exchange Commission rejected VanEck’s Bitcoin spot ETF application. In explaining the decision, the regulatory agency cited that the underlying exchange responsible for listing the ETF, the Cboe BZX, did not have a proper “surveillance-sharing agreement with markets trading the underlying assets [of Bitcoin].” The SEC then used the same rule to reject Fidelity’s Wise Origin Bitcoin Trust spot ETF the week prior. Two ETFs, the ProShares Bitcoin Strategy ETF and Valkyrie Bitcoin Strategy ETF, received SEC approval partly because they track the price of regulated Bitcoin futures contracts, and not its spot price derived from averages of numerous exchanges.