VanEck SolidX Bitcoin (BTC) ETF Has Been Withdrawn After Eight Months of Delays

January 23, 2019 / by Zachary Mashiach

The Securities and Exchange Commission (SEC) issued a statement today, indicating that the application for the VanEck SolidX Bitcoin exchange traded fund (ETF) has been withdrawn.

The VanEck SolidX Bitcoin ETF was originally submitted for approval in June 2018, and the decision on it was delayed in August, September, and December. A final decision was required by February 27, since that is the maximum time the SEC can delay the decision.

Jan Van Eck said on CNBC that the VanEck SolidX Bitcoin ETF was withdrawn because it would have been rejected outright, and more time is needed to convince the SEC. According to Jan Van Eck, the ETF will be resubmitted to the SEC at an undisclosed date in the future.

The VanEck SolidX Bitcoin ETF was highly anticipated by the crypto space during 2018. It would have been the first physical Bitcoin ETF since the VanEck SolidX Bitcoin ETF was supposed to be backed by actual Bitcoins. Investment into the ETF would have increased Bitcoin’s spot demand and price.

Further, the VanEck SolidX Bitcoin ETF would have been available on major stock trading platforms, making it a great way for institutional investors and stock traders to diversify into Bitcoin. Many in the crypto world believed that the inflow of capital into the Bitcoin market from the VanEck SolidX Bitcoin ETF could lead to a major rally.

About 1,400 comments in favor of the VanEck SolidX Bitcoin ETF were submitted to the SEC, but the SEC responded by giving out an 18-question test to commenters with multiple parts per question and a 21-day deadline to complete it.

The questions centered around how the Bitcoin market can be manipulated, Bitcoin lacks a single global price, there is a lack of exchanges disclosing data to the government i.e. surveillance, and insurance for the Bitcoins.

The lack of surveillance and market manipulation questions were particularly harsh, since there was nothing the people behind the VanEck SolidX Bitcoin ETF could do to fix those problems. Essentially, the SEC decided that the Bitcoin market was too risky for an ETF, no matter how well-designed the VanEck SolidX Bitcoin ETF was.

The Bitcoin market has only reacted slightly to the news that the VanEck SolidX Bitcoin ETF is no longer happening, perhaps because this event was already priced in after the several delays that have already happened.

With the canceling of the VanEck SolidX Bitcoin ETF application, it appears there will be no Bitcoin ETF at all for the foreseeable future.