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VanEck, SolidX Pull Out Bitcoin ETF Proposal From SEC Review

By Zacks Investment ResearchStock MarketsSep 18, 2019 01:00AM ET
www.investing.com/analysis/vaneck-solidx-pull-out-bitcoin-etf-proposal-from-sec-review-200465871
VanEck, SolidX Pull Out Bitcoin ETF Proposal From SEC Review
By Zacks Investment Research   |  Sep 18, 2019 01:00AM ET
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Giving a shock to investors who wish for SEC approval to a bitcoin ETF, CBOE BZX Exchange withdrew its VanEck/SolidX bitcoin ETF proposal on Sep 13. The news was disclosed on Sep 17 on a notice published by the SEC.

This is the second time that VanEck and SolidX have withdrawn the proposed ETF. The companies removed the same ETF proposal in January, amid a prolonged government shutdown. The SEC had already deferred its decision on an approval of a bitcoin ETF and now the regulatory body is on a final deadline of Oct 18 to give a ruling on the matter.

Investors should note that the latest proposal for a bitcoin ETF was Van Eck’s third attempt. In mid-2018, the company had collaborated with blockchain company SolidX. The plan was to make the product physical and not futures based i.e. comprising actual bitcoin, which will be “insured against any loss or theft.” The VanEck SolidX Bitcoin Trust was supposed to have the ticker symbol “XBTC” (read: Yet Another SEC Disapproval for Bitcoin ETF: What Next?).”

The decision of withdrawing the proposal came just weeks after Van Eck began offering a limited Bitcoin ETF for institutions. Shares were sold in compliance with SEC’s Rule 144A, which allows sale of privately placed securities to “qualified institutional buyers.” The rule is made to excuse shares from securities registration. With this, VanEck and SolidX are in a position to offer shares of “their VanEck SolidX Bitcoin Trust to institutions such as banks and hedge funds, but not retail investors, the report notes,” per cointelegraph.com (read: Van Eck, SolidX Attempt to Bring a Partial Bitcoin ETF).

However, the limited version of bitcoin ETF failed to garner enough response from the market. VanEck just managed to amass a total net asset of over $40,000 for its “limited Bitcoin ETF.” Such tepid response may have held VanEck, SolidX back from venturing into the space with another product.

Also, SEC Chairman Jay Clayton recently indicated that “there's work left to be done” for the bitcoin ETF to get a regulatory nod. It shows that Oct 18 could bring another disappointment for the aspiring bitcoin ETF investors.

Which ETFs Are Lying With the SEC?

Two other bitcoin ETF proposals are waiting for SEC approval. One would include both bitcoin and U.S. Treasury bonds in the Trust and has been filed by Wilshire Phoenix. It is due for an initial deadline at the end of September. The other fund is filed by Bitwise Asset Management with NYSE Arca, and is due for a decision on Oct 13, per coindesk.com.

Any ETF Alternatives to Play Bitcoin?

Though bitcoin ETFs are not available to investors, they have blockchain ETFs at their disposal. Per a source, “the blockchain in Bitcoin literally acts a ledger; it keeps track of the balances for all users and updates them as money changes hands.”

So, if investors cannot lay their hands on a bitcoin ETF now, they can definitely familiarize themselves with the concept through blockchain ETFs like Reality Shares Nasdaq NexGen Economy ETF BLCN, Amplify Transformational Data Sharing ETF (TSXV:BLOK) and First Trust Indxx Innovative Transaction & Process ETF LEGR.

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Reality Shares Nasdaq NexGen Economy ETF (BLCN): ETF Research Reports

Amplify Transformational Data Sharing ETF (BLOK): ETF Research Reports

First Trust Indxx Innovative Transaction & Process ETF (LEGR): ETF Research Reports

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Zacks Investment Research

VanEck, SolidX Pull Out Bitcoin ETF Proposal From SEC Review
 
VanEck, SolidX Pull Out Bitcoin ETF Proposal From SEC Review

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