VanEck is trying a third time for Bitcoin ETF

Trading Bitcoin ETFs

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VanEck, a cash management company is applying again to be allowed to trade Bitcoin ETFs after two previous unsuccessful attempts. This is the third time the firm is attempting and this time it’s teaming up with blockchain company SolidX. More to that the firm is basing the fund on Bitcoin and not Bitcoin futures.

The VanEck SoldiX Bitcoin Trust will be offered in shares and each share is set to cost 200,000 dollars according to the information filed with the Securities and Exchange Commission on 6th June 2018. This high most is an illustration of the fund’s focus on institutions rather than retail investors. If the filled regulatory filings are accepted then the ETF should be launched in the first quarter of 2019 according to Daniel H. Gallancy the CEO of SolidX. The fund will work by tracking bitcoin index from MVIS which is a subsidiary of VanEck which uses prices from other over the counter trades rather than electronic crypto exchanges.

At the moment it’s not clear whether the current stability of Bitcoin or the structure of the ETF will help the fund get approval from the regulators.

Unsuccessful attempts

The first time VanEck applied for an ETF was in August 2017 but the request was not successful because at the time futures did not exist. The company the applied again after bitcoin futures were launched in December 2017 but the application was withdrawn at the request of SEC staff in January 2018. During the January withdrawal, SEC raised several concerns about the price volatility of Bitcoin and the ability of customers to withdraw their funds when required.

When SEC was contacted yesterday about the new application they did not respond. At the time Bitcoin was trading at 7,500 dollars which have been the trading range for some months. The journey has not been simple for SlidX who also struggled to launch a Bitcoin ETF after the rejection in March 2017. At the period SEC disallowed the firm’s submission for an exchange-traded creation which was based on physical digital coins. During that time the commission also rejected a similar application by Winklevoss twins.

The new partnership between VanEck and the other firms shows that, VanEck will take care of themarketing part of the new Bitcoin ETF while SolidX will sponsor the underlying index while the Bank of New York Mellon will take custody of the filling. If SEC accepts the application then the ETF will start trading under a new symbol XBTC which will be appearing Cboe BZX Exchange.

According to the CEO of VanEck Han van Eck:

“Bitcoin has already emerged as a legitimate investment option and it’s already the digital gold that makes sense to many investor’s portfolios. A well-constructed and managed physically backed Bitcoin ETF will be designed to provide exposure for the Bitcoin price and an insurance component will help in the protection of shareholders against operational risks of buying and holding Bitcoin.”

 

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