VanEck Renews Bitcoin ETF Effort With An Institutional Focus

VanEck is renewing its push for an exchange-traded fund based on bitcoin. The New York-based ETF issuer said it's partnering with fintech company SolidX to launch physically-backed bitcoin ETF.

The ETF will be registered under the Investment Company Act of 1940 (40-Act). VanEck was the first ETF issuer to file for a 40-Act bitcoin fund, having done so last August.

What Happened

Previous efforts at bitcoin ETFs have been met with resistance by U.S. regulators, including the Securities and Exchange Commission. It has been several years since the Winklevoss brothers filed for the Winklevoss Bitcoin Trust, but that fund has yet to come to market.

Bitcoin futures debuted on the CBOE in December and CME Group launched bitcoin futures later that month, moves some industry observers believed would facilitate the debuts of bitcoin ETFs. Soon after bitcoin futures debuted in the U.S., however, the SEC requested several ETF issuers, including VanEck, to withdraw plans for related ETFs.

Why It's Important

The VanEck SolidX Bitcoin Trust will attempt to address one of the issues concerning regulators: the theft of bitcoin. VanEck said the fund will be insured to guard against theft. SolidX will be the fund sponsor while VanEck will provide marketing services.

Assuming the ETF comes to market, it will debut with a $200,000 share price, meaning it will be focused on institutional investors. Bitcoin traded around $7,650 in U.S. trading Wednesday. A share price of $200,000 would put the VanEck SolidX Bitcoin Trust in rarefied company as just four stocks in the S&P 500 have share prices north of $1,000.

Shares of the trust will only be issued in one or more blocks of five shares, according to a filing with the SEC.

“VanEck has also, through its MVIS subsidiary, created several comprehensive digital asset indices designed to provide a measurement of both individual digital assets and various baskets of digital asset exposures,” according to a statement.

What's Next

VanEck and SolidX plan to work with regulators to get the new fund approved. If the fund comes to market, it will trade on CBOE under the ticker “XBTC.”

SolidX has been involved with the cryptocurrency space since 2011 and has been trying to launch a bitcoin ETF since 2015. The New York-based company “develops cryptography products and services with a focus on software applications and capital market,” according to the statement.

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