Another ‘Bitcoin-ETF’ Workaround Found, Creators Hope It’ll Work
On Thursday, U.S.-based Van Eck Securities Corp. and SolidX Management LLC plan to start selling shares in a limited version of a crypto exchange-traded fund (ETF), The Wall Street Journal reported, citing both companies.
They are employing a rule that will exempt the shares from securities registration, but the shares can be sold only to certain institutional buyers, according to the report. Both companies hope that this limited version will act as a proof that a bitcoin ETF can work, it added.
The firms first jointly applied for a bitcoin ETF in 2018 and said they still expect eventual approval.
As reported, Reality Shares ETF Trust, a subsidiary of U.S.-based asset manager Blockforce Capital, attempted to introduce a “bitcoin ETF workaround” in February 2019. However, the proposal was withdrawn at the request of the U.S. Securities and Exchange Commission (SEC).
Watch the latest reports by Block TV.
The SEC declined comment on the new initiative.
Eric Balchunas, a senior ETF analyst for Bloomberg Intelligence, reacted that the “whole thing seems very $GBTC-ish [Grayscale Bitcoin Trust] so until proven otherwise I am not calling this an ETF.”
One one hand, sounds like this could irk the SEC, but on the other hand the SEC has shown that if you can just get the genie out of the bottle eg $MJ they will accept it and work with situation. Better to ask for forgiveness than permission.
— Eric Balchunas (@EricBalchunas) September 3, 2019
A new round of decisions by the SEC on bitcoin ETFs is expected this autumn.
It is estimated that a bitcoin ETF in the U.S. would unlock the financial advisor marketplace, as half the money in the U.S. is managed by financial advisors. And right now, it’s very difficult for them to access the crypto market.
And while the recent initiative by Van Eck and SolidX is going to be available for institutional investors only, some members of the Cryptoverse noticed that the announcement coincided with the recent bitcoin rally:
Love how #bitcoin pumped a few hundred bucks BEFORE the ETF news was public #️
— TEDDY 🌐 (@teddycleps)