A Bitcoin ETF may be right around the corner – at least according to a new filing to the Securities and Exchange Commission.
Van Eck Associates Corp. and SolidX Partners Inc. recently filed a request to list a bitcoin-linked ETP to the United States Securities and Exchange Commission (SEC), according to a report by The Wall Street Journal and Bloomberg.
The application indicates that the potential bitcoin ETF will be physically-backed. That means the fund will hold actual bitcoin. The potential bitcoin ETF would also be insured against loss or left by “a syndicate of insurers”.
To date, one of the biggest issues with a bitcoin ETF has been the lack of FDIC insurance and similar protections for investors.
This isn’t the first time SolidX and Van Eck have been linked to a bitcoin ETF. In January, the SEC asked companies to withdraw around a dozen applications for cryptocurrency-linked funds. Van Eck and SolidX were among the companies who had previously filed to list a bitcoin ETF.
Last year, the SEC rejected the Winklevoss Bitcoin Trust ETF, dashing the hopes of investors who had hoped to see a bitcoin ETF before the end of the year.
What makes this new application different?
Well, according to Bloomberg, which cited SolidX’s CEO Daniel H. Gallancy, SolidX and Van Eck, “hope to have addressed regulators’ concerns with changes they made in the new, joint request by increasing the share price and basing prices off regulated trading firms.”
In other words, SolidX and Van Eck’s potential bitcoin ETF would use the bitcoin price as reported by regulated exchanges only – not unregulated exchanges that facilitate pump-and-dump schemes and price manipulation.
Van Eck’s subsidiary, MVIS, will compile an index of bitcoin prices across regulated exchanges, then publish price updates throughout the day.
Who are SolidX and Van Eck? Van Eck oversees more than $45 billion in assets while managing 70+ exchange-traded products. SolidX, meanwhile, is a New York-based financial technology company specializing in cryptography software and products for capital markets.
How Will the Bitcoin ETF Work?
This potential bitcoin ETF from Van Eck and SolidX would launch with a share price of approximately $200,000.
Typically, most ETFs launch with a double-digit share price to target individual investors. With this ETF, however, the company is targeting institutional investors.
What about storage?
One of the biggest issues with a bitcoin ETF has been the storage solution. With this bitcoin ETF, SolidX would manage custody of bitcoin using a cold storage solution. That means private keys will be kept offline.
Most bitcoin investment funds use cold storage solutions. This latest bitcoin ETF application from SolidX and Van Eck, however, may be the first bitcoin ETF where funds are insured – similar to how the FDIC insures traditional bank accounts and money market accounts.
“Funds will be insured one-to-one by a syndicate of insurers, which the firms didn’t disclose,” explains Bloomberg.
As news of this latest bitcoin ETF broke, the headers of Van Eck and SolidX both revealed that they currently own bitcoin. James van Eck and SolidX’s Gallancy both reported owning bitcoin.
Ultimately, there are a number of major investment firms competing to launch the first bitcoin ETF. This application from Van Eck and SolidX, however, is the latest exciting news from the bitcoin ETF front – and it could mean a bitcoin ETF is just around the corner.