New Physically-Backed Bitcoin ETF Proposal Filed with SEC
Van Eck Associates Corp. and SolidX Partners Inc. are hoping to have learned from past efforts at getting SEC approval for a Bitcoin exchange traded fund.
The proposed fund which they filed earlier today will apparently be physically-backed by actual Bitcoin. It will also be insured against the kinds of security comprises that have affected some crypto exchanges in the past.
Could the Latest Filing Finally Create the First Bitcoin ETF?
The latest request for a Bitcoin ETF was filed earlier today with the U.S. Securities and Exchange Commission (SEC). It was filed by VanEck and SolidX – two firms that are well-suited to create such a financial product. They’re hoping to apply what they have taken from a previous failed filing and become the first Bitcoin ETF sanctioned by the SEC.
Last year, there was a lot of hype surrounding a potential Bitcoin ETF that the Winklevoss twins had put forward for SEC approval. However, this was knocked back by the financial regulators.
Excitement once again grew at the end of the year following the successful launch of both the CME Group and CBOE Bitcoin futures contracts. However, earlier this year, the SEC denied around a dozen similar applications for ETFs. The financial regulators cited high volatility, lack of liquidity, and lack of regulation as reasons behind the rejections this January.
VanEck and SolidX were amongst those to have a proposal rejected in January. However, according to today’s filing, the two firms have returned to the drawing board in an effort to directly address the concerns of the financial regulators. The CEO of SolidX, Daniel Gallancy, told Bloomberg via a telephone interview:
“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.”
The CEO went on to tell the publication that the proposed ETF would base their prices off regulated trading firms. It will also be physically-backed by Bitcoin and will be insured by a group of insurers that are still to be named. SolidX will reportedly handle the keeping of the Bitcoin itself. This would involve a cold storage solution so that private keys are at considerably less risk of compromise.
For those that don’t know, VanEck are a New York-based money management firm. They are in charge of over $45 billion in assets and have dealt with many exchange-traded products since their formation in 1955. Meanwhile, SolidX are also working out of New York city. They specialise in fintech and have developed cryptographic software as well as capital markets products. Clearly, this combination of firms makes them well suited to creating the first Bitcoin ETF. Also, both firms reportedly own Bitcoin themselves.