From Gold ETF to Solana ETF: A Look into VanEck's Rise to Success

Author: jk, Odaily Planet Daily

The rise of the ETF-focused investment company VanEck is filled with bold innovations and strategic decisions. From launching the gold ETF to the recent Solana ETF, VanEck continuously pushes its boundaries, driving transformation in the financial markets. With the rapid development of the cryptocurrency market, VanEck is at the forefront of the industry, applying for the Solana ETF and opening up new investment avenues for investors.

This article will delve into VanEck's past history and its decisions from gold ETFs to Solana ETFs.

History of VanEck

In 1955, John van Eck founded Van Eck Global against the backdrop of the Marshall Plan, which opened Western Europe to American investors, capitalizing on the growing international stock market to provide post-World War II investment opportunities for American investors. His father immigrated to the United States from the Netherlands in the early 20th century. In the same year, Van Eck established the first international equity mutual fund.

In 1968, the company launched one of the first gold funds in the U.S., the International Investors Gold Fund, shifting much of its portfolio into stocks of gold mining companies. From the 1970s to the mid-1980s, gold experienced a bull market, and the company achieved significant success. The International Investors Gold Fund attracted substantial subscriptions, managing assets exceeding $1 billion. John van Eck was subsequently invited to participate in then-popular talk shows such as "Wall Street Week" and "The Merv Griffin Show."

1980s to Early 2000s: The Low Point

However, after the mid-1980s, the boom in the gold market ended, and the company's business slowed down. By February 1998, the assets of the International Investors Gold Fund had shrunk to $250 million. John's son Jan said, "He became a gold enthusiast. Basically, throughout my career, the value of gold has been declining, which in our industry means you are suffering redemptions, and the fund is depreciating because the price of gold fell from $800 an ounce to a low of $250 an ounce."

To cope with the decline in the gold market, the company began developing investment businesses in emerging Asian markets in the 1990s. In 1996, the company signed a joint venture agreement with the predecessor of Shenwan Hongyuan, aiming to explore the fund market in China. However, the Asian financial crisis in 1997 drastically reduced demand for emerging market funds. One of the company's funds, the Van Eck Asia Dynasty Fund, saw its managed assets drop from $46.3 million at the end of 1996 to $11.2 million by the end of 1997.

From 1994 to 1998, the company's managed assets decreased by 21% from $1.82 billion to $1.44 billion. In 1997, metal prices hit a 12-year low. Only its Global Hard Assets Fund achieved a positive return of 26% over the three years ending in December 1997. As a result, the company faced redemptions, and its client base shrank.

After 2006

In 2006, the company decided to enter the ETF business, launching its first ETF product, the Market Vectors Gold Miners ETF, allowing investors to invest in gold through the stock market rather than directly in gold. Although it was not as popular as the SPDR Gold Shares launched in November 2004, its managed assets grew to $5 billion, becoming one of the company's greatest successes. By November 2009, the company had issued over 20 ETF products, with total managed assets reaching $9.7 billion.

John van Eck frequently traveled overseas for business, especially to Europe. During one trip, he met a German woman, Sigrid, who was 20 years younger than him, and brought her back to the U.S. to marry. She later became VanEck's CFO and the mother of two children. In the early 1990s, his sons Derek and Jan joined the company, and VanEck undertook a series of business initiatives, primarily focusing on ETFs, which led to significant growth. Since Derek's passing in 2010, Jan has managed the company's growing global business and continues to do so today. Jan graduated from Stanford Law School and, inspired by tech entrepreneurs, joined the family business and began the transformation towards ETFs.

Jan van Eck said, "My father placed great importance on economics and history, while I am more business-oriented, which allows me to seize the opportunity of ETFs and shift towards non-active management of gold funds."

In Europe, VanEck opened its first office in 2008, focusing on index business, and subsequently opened an office in Switzerland in 2010, concentrating on institutional distribution and the development of alternative and active investment management strategies. In 2018, VanEck acquired the Dutch ETF provider "Think ETF Asset Management B.V." to expand its ETF product offerings in Europe and international markets.

On March 2, 2021, VanEck launched the Vectors Social Sentiment ETF on NYSE Arca, with the stock code "BUZZ." The fund consists of stocks popular on social media. On its first trading day, the fund attracted $280 million in inflows, making it one of the top 12 best debuts in history.

To date, VanEck has issued over 100 ETFs, managing more than $90 billion in assets.

The success history of VanEck, image source: VanEck official website

Gold ETFs and VanEck

Gold ETFs are financial products that track the price of gold, allowing investors to buy and sell shares of gold through stock exchanges without needing to hold physical gold. The emergence of gold ETFs has greatly simplified the process of investing in gold, reducing transaction costs and risks.

The first gold exchange-traded product was the Central Fund of Canada, a closed-end fund established in 1961. The fund amended its corporate charter in 1983 to provide investors with products that hold physical gold and silver.

In 1968, VanEck established the first open-end gold stock mutual fund in the U.S.

In 1971, U.S. President Nixon ended the dollar's convertibility to gold. VanEck's gold fund (now known as the VanEck International Investors Gold Fund) was the first of its kind, and as the price of gold soared from $35 an ounce to $800 an ounce, the fund became the best-performing fund in the industry.

Gold performance since 2000. Source: VanEck

Although John was passionate about gold, his son Jan van Eck realized that the company's over-reliance on gold was a vulnerability. He shifted the company's focus and was a pioneer in entering the ETF space. Today, ETFs account for 90% of VanEck's business.

On March 28, 2003, the first gold ETF developed by ETF Securities was listed on the Australian Securities Exchange. On November 18, 2004, State Street Corporation launched the SPDR Gold Shares listed in the U.S., which exceeded $1 billion in assets within the first three trading days.

In 2006, VanEck launched its first gold ETF product, the Market Vectors Gold Miners ETF, just two years after the first gold ETF in the U.S. To date, this ETF has an average trading volume of around $20 million, with total net assets under management reaching $13.2 billion.

VanEck in the Crypto World: Applying for the First Bitcoin Futures ETF, the First Spot Ethereum ETF, and the First Solana ETF

VanEck is a significant player in the Bitcoin ETF and Ethereum ETF space. Unlike BlackRock's high approval rate, VanEck has always been labeled as the "first applicant, bold trial and error." On August 11, 2017, VanEck submitted an S-1 application to launch the first Bitcoin futures ETF, becoming the first issuer to apply for an ETF investing in Bitcoin futures. Subsequently, VanEck continued to apply for a spot Bitcoin ETF.

However, in November 2021, the U.S. SEC rejected the application, citing concerns that potential fraud in the cryptocurrency market could extend to regulated exchanges. From 2021 to March 2023, its applications were rejected three times. Nevertheless, VanEck persisted, and with the wave of approvals for spot Bitcoin ETFs in 2024, it finally succeeded in launching the product.

After that, VanEck was the first company to submit an application for a spot Ethereum ETF in 2021, nearly three years before the SEC began engaging with issuers, including BlackRock, Fidelity, and Ark Invest.

However, unlike Fidelity and BlackRock, which only focused on Bitcoin and Ethereum ETFs (with BlackRock's digital asset head Robert Mitchnick publicly stating that BlackRock believes clients have "almost no interest" in cryptocurrencies other than Bitcoin and Ethereum), VanEck took an additional step: applying for a Solana ETF.

At the end of June, VanEck submitted an application for a spot Solana ETF to the U.S. Securities and Exchange Commission (SEC), becoming the first issuer to apply for a Solana ETF. In a post on the X platform, VanEck's head of digital asset research, Matthew Sigel, stated, "The decentralized nature, high utility, and economic viability of SOL align with the characteristics of other established digital commodities, reinforcing our belief that SOL could be a valuable commodity with uses for investors, developers, and entrepreneurs seeking alternatives to the duopoly of app stores."

Coindesk noted, "VanEck is known for its pioneering position in the digital asset space."