Van Eck and Solid X have teamed, after both failed previously to gain formal regulatory approval for their respective bitcoin core (BTC) exchange traded fund (ETF) proposals, reapplying to the US Securities and Exchange Commission (SEC) today. They’re proposing a physically backed bitcoin ETF, the Van Eck Solid X Bitcoin Trust, and it just might be poised to break the losing streak of mainstreaming BTC on Wall Street. This time, they’re aiming at institutional investors by pricing it at $200,000 per share.
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Van Eck and Solid X Team for Bitcoin ETF Priced at $200,000
Van Eck CEO Jan van Eck cheered, “I believe that bitcoin has emerged as a legitimate investment option, as a type of ‘digital gold’ that may make sense for investors’ portfolios. The Solid X team has in-depth experience with bitcoin, cryptography, and capital markets. We’re pleased to join with them in supporting the effort to bring a physically-backed bitcoin ETF to market.” The Van Eck Solid X Bitcoin Trust will also offer itself as being insured against bitcoin lost or stolen.
The Wall Street Journal reports, “The firms also set a relatively high per-share price: $200,000. The price tag is designed to aim the product at institutional rather than retail investors.” And in “determining a marketing partner,” Solid X CEO Daniel H. Gallancy underscored, they “looked for a firm with a clear understanding of the potential of bitcoin and the role it can play in an investment portfolio. Van Eck is deeply involved in this space, understands its potential, and has a long track record of successfully opening new avenues for investors to access unique and compelling investment opportunities.”
The two have in common being New York-based and the dubious honor of having been shot down by the SEC when they attempted individually to list a bitcoin ETF. The present filing, as of 6 June 2018, will be watched closely by the ecosystem. Jan van Eck expressed optimism at their latest tactic, “We believe that collectively we will build something that may be better than other constructs currently making their way through the regulatory process. A properly constructed physically-backed bitcoin ETF will be designed to provide exposure to the price of bitcoin, and an insurance component will help protect shareholders against the operational risks of sourcing and holding bitcoin.”
Chicago Board Options Exchange (Cboe) and its BZX Equities Exchange is believed to be where such a fund, pending approval, would ultimately be listed. The Cboe market maker was the first to list Bitcoin Futures back in December of last year. Results have been decidedly mixed after ecosystem enthusiasm almost promised BTC would moon in response. Now, some have taken to blaming exchanges such as Cboe and its crosstown rival CME for retarding the BTC spot price, for essentially being Crypto Winter’s catalyst as it were.
Could be the Right Combination at the Right Time
“It is important to communicate with investors about the risks as well as the opportunities, especially for new investment areas, and we have been committed to this effort,” the Van Eck CEO stressed.
Indeed, earlier this year, these pages reported how in a “Staff Letter: Engaging on Fund Innovation and Cryptocurrency-related Holdings of 18 January, signed by newly appointed Director Dalia Blass from the Division of Investment Management, the SEC wrote to the Investment Company Institute and Asset Management Group Securities Industry & Financial Markets Association (SIFMA) about the prospects of bitcoin ETFs.” It was a letter filled with admonitions and warnings and potential confusions. One thing was glaringly clear: any bitcoin ETF going forward must contend with its concerns.
Two months ago to almost the day, however, hopeful signs appeared to emerge. Presumably in response to a Cboe open letter plea for action from President and COO Chris Concannon, the SEC seemed to be moving along further than it had previously while it considered two fund candidates from Pro Shares. Comment portion of the process has just wrapped.
The Journal quotes Mr. Gallancy of Solid X as reminding they “never had any intention of giving up.” Neither has the broader crypto investment community, showing how it is not content to just sit back and wait for permission. “Huobi, the Singapore-headquartered cryptocurrency exchange, has decided to create its own ETF style instrument based on its recently launched index of ten digital assets,” News.Bitcoin.com explained. In further anticipation, “Okex, the Chinese-run cryptocurrency exchange based in Hong Kong, has joined the recent trend of trading platforms creating their own ETF-like investment tools for their users. It launched its first exchange traded tracker (ETT) on June 5, which was fully sold out within just three minutes,” we explained recently.
Are Wall Street bitcoin ETFs around the corner? Let us know in the comments.
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