Bitcoin (BTC) Exchange-Traded Funds (ETF)

It is widely known that the US Security and Exchange Commission (SEC) has taken a contrary stance towards Bitcoin (BTC) and everything related to cryptocurrency business.

Nonetheless, the business world isn’t going to back down just like that when the financial establishment realized the opportunity behind the new digital assets.

The SEC has turned down all the filings for Bitcoin ETFs (Exchange-Traded Funds) to date, with Securities and Exchange Commission Director, Dalia Blass, explaining that there are significant investor protection issues that need to be examined before giving the ETF’s the green light.

But it seems that their policy could be changed.

On June 5, 2018, the partnership between VanEck and SolidX filed for their Bitcoin ETF approval with the SEC.

“We believe that collectively, we will build something that may be better than other constructs currently making their way through the regulatory proses,” Jan VanEck stated at the time.

“A properly constructed physically-backed bitcoin ETF will be designed to provide exposure to the price of bitcoin, and insurance component will help protect shareholders against the operational risks of sourcing and holding bitcoin,” he explained.

Instead of turning the proposition down, as they were doing before, the SEC asked for the public opinion.

One of many supporting comments was given by the President of LogicBox, Inc., Jeremy T. Goemaat.

“Sirs, I strongly support the listing and trading shares of SolidX Bitcoin Shares, which has been issued by the VanEck SolidX Bitcoin Trust,” Goemaat declared. “This fund seeks to target high net-worth investors, so I do not see a risk to retail investors,” he explained and continued stating his belief: “To the contrary, I think an ETF that is backed by actual bitcoins versus futures, is much more healthy for the market and will provide more stability.”

While the public is stating various opinions, the voice of the SEC was finally heard on July 3rd, saying that the commission is working on a new design to regulate the ETF’s, according to which the companies  that sell open-ended ETFs would be allowed to launch standardized versions without requesting or obtaining consents from particular SEC regulators.

However, those companies would still need to secure the permission from the SEC to sell funds under the Investment Company Act of 1940.

“The rule would also include many of the website disclosure requirements that are in existing orders such as disclosing the ETF’s current net asset value per share, market price, and premium or discount,” Commissioner Kara Stein disclosed.

In the meantime, the Chicago Board Options Exchange (CBOE) Global Markets filed the same request in early July, and are also waiting for the SEC’s decision on the subject.

If the SEC approves these applications as scheduled, on August 10th, it could bring a massive influx of the institutional investments into the game, as the ETF’s mean that the assets can be traded without the additional technical knowledge needed to acquire and store cryptocurrencies.

It is highly probable that more institutional money would trigger the much-awaited switch of the overall sentiment across the stagnant crypto-market, whose current market capitalization fluctuates around $250 billion.