Jan van Eck stands out at the Bitcoin 2022 conference – surrounded by throngs of uber-bullish bitcoin faithful in Miami, the chief executive of the VanEck fund firm strikes a more cautious tone.
“This whole separate ecosystem is developing,” he says of crypto in an interview with Financial News on the sidelines of the conference. “And it’s not allowed to be ported into the traditional financial system – your brokerage account and the stock exchanges and stuff like that. So in a way, the old world would just get left behind if digital assets continue to develop.”
VanEck was early in offering bitcoin strategies, and started registering crypto products for clients in 2017. In mid 2020, he said, “we really accelerated our move towards getting more involved in the space, beyond ETFs, and indices.”
The investment firm offers the Digital Assets Mining ETF and Digital Transformation ETF, while the VanEck bitcoin futures ETF won Securities and Exchange Commission approval in late October. But regulators probably won’t budge on a spot ETF, which trades actual bitcoin, van Eck said.
“The regulators have made their mind up,” he said. “They don’t want to know until jurisdiction is clarified. Nothing happened last year – zero – aside from enforcement action. And nothing is going to happen this year. And I bet nothing happens next year. I mean, at this pace, nothing is gathering velocity.”
Van Eck has strong views on regulation – in February penned an editorial for Barron’s titled: What the government’s recommendations for stablecoins got wrong, and how to do better. His stance echoes that of rival Grayscale, whose CEO Michael Sonnenshein has said the SEC has created an “unfair playing field” in approving only a futures-based product for investors.
Under chairman Gary Gensler, the SEC has rejected several bitcoin ETF applications, including proposals from VanEck. Gensler’s tough stance on crypto – he has urged more regulation to rein in what he has called the “Wild West” – has made him an unpopular figure among some 25,000 bitcoin faithful attending the conference.
VanEck has other tactics up its sleeve beyond ETFs, Van Eck said. It has become not unlike hedge fund Brevan Howard, which in addition to managing a portfolio for clients has allocated to crypto while taking stakes in various startups linked to the digital sector.
A 6 April announcement listed VanEck among backers for Binance.US, the American unit of the exchange giant, when it closed its first funding round for a $4.5bn. The $200m seed round was led by RRE Ventures, Foundation Capital and others.
“We’ve become big investors, and I mean for us, big investors, in early-stage venture capital funds,” he said. “So we’re just seeing a broader view of the ecosystem.”
VanEck is a well-known name in European asset management circles – its funds have seen a boom in the region. In May, VanEck said it was the first provider to offer crypto ETPs for trading in France and the Netherlands, and the company is planning to expand further.
“Germany is very crypto friendly,” he said. “Switzerland. The continent, amazingly, is very crypto friendly. The UK. It’s, you know, it’s kind of black or white. It’s very negative.”
“We’ve been able to grow the brand and we’re lucky because some of our ETFs are very liquid for the things that they cover – gold mining shares or semiconductors, oil services. As a traditional money manager, yes, we have been most aggressive and going after digital assets. I mean, that I would like to earn that title.”
“It’s really an evolving technology,” he said. “The infrastructure around the brokerage plumbing, or the private banking, it’s still early days as to who the big winners are going to be. It’s more fluid than I would have thought.”
“It looks like blockchain technology will completely revolutionise Wall Street. The only reason it’s taking so long would be the regulators. The whole NFT phenomenon, I mean, I’m wowed by all the technology. That’s the positive.”
To contact the author of this story with feedback or news, email Trista Kelley