Photo Credit To Bilmis Ler Via Flickr
A recent report from the Wall Street Journal reveals that VanEck Securities Corp and SolidX Management are working out to sell the Bitcoin, Exchange Traded Fund (ETF)-Like Product to the institutional investors.
Not a True ETF
Looks like two Firms have unlocked the way to SEC’s delayed decision. Proposed VanEck – SolidX Bitcoin ETF decision had been blocked and delayed several times by the US Securities and Exchange Commission (SEC). However the two investment management firms have come up with the “unusual” path to pave the way out of the circumstance.
As per the guidelines of United States Securities and Exchange Commission’s (SEC) Rule 144A, privately placed securities can be traded only among “qualified institutional buyers”. Henceforth VanEck Securities and SolidX Management will apply this SEC exemption to sell shares of VanEck SolidX Bitcoin Trust to different banks, brokers and hedge funds except retail or individual investors.
Ed Lopez, head of ETF product at VanEck, told that the offering “allows for shares to be created and redeemed like ETFs, but it is not an ETF.”
“Unlike an ETF, it isn’t listed on a national exchange, rather it is quoted on the OTC Link ATS platform. This is a first-of-its-kind type of offering. Given it will trade over-the-counter via broker-to-broker transactions, we’ve been casually referring to it as a Broker Traded Fund, a BTF,” Lopez said.
Value Added Facts of ETF flashed at Press Release
- Access to investors to physically backed bitcoin product
- Can be sold by prime brokerage or traditional accounts
- A standard ETF creation and redemption process will be enables
- Marketing Services will be taken care by the VanEck
- Funds will be sponsored by SolidX
- BNY Mellon is hired to look after the daily fund, administration and transfer.
SEC hasn’t approved any Crypto ETF up until now but VanEck – SolidX’s Bitcoin ETF-like product is witnessing that they have overcome the challenge of US Securities and Exchange Commission’s (SEC). The products will be launching on Sept.5, 2019. Following the upcoming Bitcoin-ETF like product, director of digital asset strategies at VanEc, Gabor Gurbacs commented:
“We continue to support market structure developments in the digital asset space. This Qualified Institutional Buyers (QIBs) only 144A Bitcoin product may pave the way for institutional Bitcoin adoption and showcase that an appropriately regulated ETF structure can work in practice.”
Echoing the similar concern, Daniel H. Gallancy, CEO of SolidX said;
“As the first bitcoin product in the U.S. with standard ETF creation and redemption and established clearing and settlement processes, institutional investors can finally gain exposure to bitcoin within a familiar context. We view the product as an exciting next step for SolidX and VanEck in our partnership as we work to bring institutional-quality crypto asset products to the marketplace.”