Gabor Gurbacs of VanEck Confidence on Bitcoin ETF Proposal To SEC
“Unfortunately, I don't know the answer. I do know that we have addressed market structure issues and this is a chance for regulators to bring bitcoin under existing frameworks and protect investors.”
These were the words with which Gabor Gurbacs, director of the digital asset strategy at New York-based investment management firm VanEck decided to answer when asked about the suspected outcome for SEC’s pending decision on ETF.
The VanEck proposal has been deemed by some to have the best shot of being approved by the U.S. Securities and Exchange Commission (SEC).
VanEck's specific proposal came about nearly three years ago when SolidX, a financial technology company also headquartered in New York, first began to work toward bringing a bitcoin ETF to market. Since a partnership between VanEck and SolidX, announced in early June, commentary on the matter has since significantly increased in favor of approval. And it's not just crypto investors who are pushing the concept, but economists, CEOs, financial analysts and even one SEC commissioner herself.
So, Why Is VanEck-SolidX Bitcoin ETF Different From That Of Winklevoss ETF?
As Gurbacs explained, “it is an insured product.” As such, the physical bitcoins backing ETF shares would be covered in case of “theft and hacks and losses of all sorts.”
This, however, isn't the selling point for Phil Bak, a former managing director at the New York Stock Exchange and current CEO of Exponential ETFs.
The way Bak sees in, the insurance aspect of the VanEck/SolidX proposal may be useful but “could also open up a can of worms and more questions:
“explaining that “[the SEC is] always going to have some hesitation about claiming that anything is guaranteed or insured in any scenario.”
“When you launch a new fund, you can arbitrarily set the initial N.A.V. and the initial trade price where you want and they come in around $20, $25…What they've done, they've announced that they're going to set the price to $200,000, which means you can't buy a fractional share. It means the minimum notional amount that an investor can put into the bitcoin fund is going to be $200,000, which means that by definition anybody who's trading the fund is an accredited investor.”
SEC Approval Not The End Game
According to Bak, even with approval by the SEC on this front, the partnering companies “would still need to get approval from the Division of Corporate Finance from the SEC.”
In light of all the commentary that has been sparked by the VanEck-SolidX bitcoin ETF, the proposal remains in early registration stages, which though Gurbacs insists has addressed all relevant concerns to do with customer protection and compliance, price and validation, liquidity and a few other major outstanding issues does not indicate a regulated bitcoin ETF is coming soon in the U.S.