VanEck SolidX Bitcoin Trust ETF Application: Spring Board To The Moon?
On Wednesday, Van Eck Associates Corp. and SolidX Partners Inc issued their request to the Securities and Exchange Commission (SEC) requesting approval to list the first Exchange Traded Product (ETP) that is backed by insured Bitcoin. Bitcoin is the most liquid and valuable cryptocurrency in the world though it is dodged by volatility concerns that keeps institutional investors away.
As a cryptography and Fintech company, SolidX sole role would be to safeguard Bitcoin via offline storage solutions. In case of loss, investors are guaranteed because each coin is insured by a host of insurance companies who are yet to be made public.
Even though this is not the first time that both firms have requested approval from the SEC, they hope their joint request would address some of the requirements the regulator asked applicants to provide back in January 2018. Amongst them is the directive that all ETF products meant for investors should have a clear share price and most importantly prices should be anchored on real time feeds from regulated exchanges or firms.
Share Price And Index Firm Adjustment
Their application addresses this because they have since increased their share price and MVIS would be tasked with creating an index and publishing live prices throughout the day. MVIS is a subsidiary of New York’s VanEck which oversees more than 50 ETPs and has more than $40 billion of assets under their management.
Note this though, if approved, Van Eck Associates Corp. and SolidX Partners Inc new VanEck SolidX Bitcoin Trust is designed for institutional investors only. Their share price would be fixed at $200,000 completely deviating from the traditional way of listing geared towards retail or individual investors. While many would see this as an odd approach, VanEck and SolidX are playing their cards close to the chest.
Both companies are cautious and would like to avoid crossing SEC path as they had aired their concerns about firms listing ETFs for retail investments. In a phone interview with Bloomberg, the Chief Executive Officer of SolidX, Daniel H. Gallancy reiterated this saying:
“Based on various comments, it seems that regulators are concerned right now about having an ETF that is available to retail investors. We think that will change over time, but right now a good place to start is with a product geared purely toward institutional investors.”