VanEck has appointed Coinbase as an additional custodian for its HODL Bitcoin ETF. This move is part of VanEck's efforts to ensure the security of its Bitcoin holdings. Coinbase will hold the VanEck Bitcoin Trust primarily in cold storage, which means the Bitcoin will be stored offline, making it more secure against potential cyber threats. The only exception to this cold storage requirement is when Bitcoin needs to be temporarily moved to facilitate withdrawals.

The agreement between VanEck and Coinbase also outlines specific terms and safeguards aimed at securing the ETF issuer’s Bitcoin holdings. Coinbase will maintain segregated cold storage Bitcoin addresses exclusively for the VanEck’s BTC. These addresses, which are verifiable via the Bitcoin blockchain, will be separate from those used for Coinbase’s other customers.

The SEC filing also notes that Coinbase is responsible for recording and identifying in its books that the Bitcoin it holds belongs to the Trust. Furthermore, Coinbase is prohibited from withdrawing, loaning, hypothecating, pledging, or encumbering the Trust’s Bitcoin without explicit instruction from the Trust.

VanEck has evaluated Coinbase’s policies, procedures, and controls designed for the safekeeping of the Trust’s Bitcoin. While these measures are consistent with industry standards, VanEck acknowledges that it does not control Coinbase’s operations or implementation of these protocols. Consequently, there is no absolute assurance that the measures will be foolproof in protecting the Trust’s assets from theft, loss, or damage.

Coinbase has arranged for insurance to cover customer assets against specific events like fraud or theft. However, this insurance does not protect against any loss in Bitcoin value and is shared among all of Coinbase’s customers.

Earlier, VanEck had chosen the Gemini exchange as its primary custodian during the January Bitcoin ETF launch. The investment firm submitted a Form S-1 filing to the U.S. Securities and Exchange Commission, aiming to establish a Solana Trust. This trust is intended to support an exchange-traded fund (ETF) that tracks Solana’s spot price. If the proposal receives approval, the Solana ETF will be traded on the Cboe BZX Exchange.

Matthew Sigel, who leads digital asset research at VanEck, shared his enthusiasm regarding the launch of the first Solana ETF in the United States. Sigel pointed out that SOL, Solana’s native token, serves a role akin to that of digital commodities like Bitcoin and Ethereum. In addition, he noted, “It is utilized to pay for transaction fees and computational services on the blockchain. Like ether on the Ethereum network, SOL can be traded on digital asset platforms or used in peer-to-peer transactions.”

On June 28, 21Shares filed for a Spot Solana ETF. VanEck's spot Bitcoin ETF is now expected to be listed under the ticker symbol "HODL," which is derived from the term "hold" or the acronym "hold on for dear life." Bitcoin enthusiasts commonly use this phrase to describe their strategy of buying and holding onto the digital asset without selling it. The choice of the "HODL" ticker symbol has garnered attention from analysts, with Nate Geraci, president of advisory firm The ETF Store, suggesting that those familiar with cryptocurrencies would appreciate it, while it may be less understood by "boomers." Geraci believes the ticker symbol will help avoid negative attention on adviser statements, as many advisers already advocate holding in different asset classes.

Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, noted that VanEck's ticker symbol choice differs from the "more boring Boomer-y choices" made by other companies like BlackRock and Fidelity. He sees it as a unique and unconventional approach. VanEck themselves tweeted. Several companies, including BlackRock, Fidelity, VanEck, Valkyrie, and Franklin Templeton, are vying for SEC approval of a spot Bitcoin ETF. While the SEC has not yet indicated its support for these filings, it has engaged in discussions with representatives from the applicant firms to address technical details in their fund proposals. VanEck anticipates SEC approval for the spot Bitcoin ETF in January and projects inflows of $2.4 billion in the first quarter.