XBTC What is this All About the New Bitcoin ETF Proposal?
There have been an important amount of bitcoin ETF proposal in the last months, but all of them have been denied by the Securities and Exchange Commision (SEC) or withdrawn by companies. This time, VanEck and SolidX are partnering in order to offer a new proposal.
The VanEck SolidX Bitcoin Trust ETF aims to solve all the major concerns that the SEC has regarding these funds. For example, the new ETF would be carrying bitcoin theft insurance in order to protect shareholders from exchange hacks or other fraudulent activity.
Additionally, the $200,000 share price will make the fund available only to wealthy and institutional investors, thus, avoiding general population to have access to it. The proposal clearly addresses the concerns from the SEC, but it is not clear whether it will be enough or not for the regulators working at the SEC.
Indeed, at the beginning of this year, there were more than a dozen bitcoin ETF filings made with the SEC. There are several companies that have been working with ETFs in business that use futures, so it seemed very likely that the SEC would give approval on these ETFs based on Bitcoin futures.
The SEC explained that it was not ready, and it raised concerns about how these Bitcoin futures would be accurately priced. Moreover, they said that there was a potential lack of liquidity meaning that it could severely harm investors. At the moment, there are no indications that show that the SEC has changed opinion.
Back in August 2017, VanEck decided to present the first bitcoin ETF using futures, but the SEC did not approve it. SOlidX, an important fintech company that is working in the bitcoin ecosystem, decided to make an attempt with a physically-backed bitcoin ETF, but in the same way, the SEC did not like that.
Now, these two firms are working together in order to address the major concerns that the SEC has related to Bitcoin ETFs.
The SEC explained that it is not comfortable with the investment environment around Bitcoin. For example, it was very concerned when Bitcoin approached to $20,000 dollars and then it started to fall.
The SEC was also worried about the same thing related to Blockchain ETFs and asked the companies to remove the word ‘blockchain’ from their names.