Is Van Eck And SolidX's Bitcoin Trust ETF Finally The Real Deal?
Tanzeel Akhtar | Sep 09, 2019 08:13
For the past few years, even as Bitcoin peaked, collapsed, then rose once again from its recent, sustained lows, a variety of individuals and investment management firms have tried to launch a Bitcoin exchange traded fund (ETF), which would list on one of the major U.S. equity indices.
To date, every single proposal, however, has been rejected or delayed by the U.S. Securities and Exchange Commission (SEC), on concerns of lack of protection for retail investors from fraud and market manipulation.
Now, VanEck and SolidX Management are attempting to bypass the regulator, using an SEC exemption in accordance with Rule 144A under the Securities Act of 1933. This, the companies say, will allow shares in its VanEck SolidX Bitcoin Trust to be offered to qualified institutional buyers but not retail investors.
According to the partners, any shares bought will provide customers access to a physically-backed Bitcoin product that is tradeable through traditional and prime brokerage accounts. To be clear, a qualified institutional investor is a purchaser who is considered financially sophisticated and manages a minumum of $100 million or more in securities. These investors are recognized by securities market regulators as needing less protection from issuers than retail investors.
The Van Eck SolidX Bitcoin Trust is being sponsored by SolidX, with VanEck providing marketing services. Bank of NY Mellon will act as the daily fund accountant, administrator and transfer agent. The Trust will price its NAV based on the MVIS Bitcoin US OTC Spot Index. It was scheduled to launch last Thursday.
Many, however are skeptical of this latest offering. Some, including Investing.com's senior analyst Clement Thibault, have dismissed it as not a real ETF, but rather another Bitcoin Investment Trust (OTC:GBTC) offering, which trades over the counter and is held by a very small number of institutions. In a recent tweet Thibault said:
Don't get too excited about the Van-Eck SolidX "Bitcoin ETF"... It's another GBTC, not the retail Bitcoin ETF everyone's been hoping for for the past 2 years.
There's still no Bitcoin retail ETF, I don't expect one anytime soon either.
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