VanEck to Offer Bitcoin ETF Workaround

September 6, 2019 / by Crypto.IQ

As VanEck Securities and SolidX Management wait for the green light from the U.S. Securities and Exchange Commission (SEC) on their Bitcoin ETF proposal, they are rolling out a ‘limited’ version to institutions. The modified investment product will be offered through an SEC exemption — a first for the cryptocurrency industry.

Van Eck Provides Institutional Investors with ETF Alternative

The third quarter of 2019 has been dominated by news and announcements related to institutional products in the cryptocurrency space. Binance and Bitfinex announced cryptocurrency derivatives; Bakkt has set aside the date of their launch and now Van Eck wants to speed up the Bitcoin ETF approval process.

The investment management firm, in partnership with SolidX, plans to start selling shares for the digital asset ETF by releasing a limited version of the product. The limited version of the fund will be aimed at certain institutional investors like banks, hedge funds, brokers – and excluding retail investors.

Van Eck Takes Advantage of Rule Exemption

The two dominant players pushing for a Bitcoin ETF are leveraging a SEC exemption to release a limited version of the fund.

It’s all thanks to the SEC’s Rule 144A, which allows securities to be traded among qualified institutional buyers without SEC approval. Yet, the ‘limited’ ETF will have shorter holding periods and will be available to a very small group of established financial firms.

The SEC is still holding out on a few applications which it recently said it needed more time to make a decision. Three firms, which include Van Eck and Solid X, will find out if they have been successful with their proposal for a Bitcoin ETF towards the end of September and into October.

While this limited version is much closer to the already existing offering from Grayscale Investments as a private fund, Van Eck claims that this will show the regulator that a Bitcoin ETF can work.

It’s undeniable that a Bitcoin ETF has been one of the most-awaited events in the cryptocurrency world for some time, but the SEC is adamant that some of the concerns regarding price manipulation and the commission’s access to monitoring haven’t been sufficiently addressed.

The SEC representatives didn’t want to comment on Van Eck’s move.