It has been revealed that the highly anticipated VanEck SolidX Bitcoin ETF will use an index comprised of pricing data from three of the largest OTC bitcoin exchanges. The index is known as the MVIS Bitcoin US OTC Spot Index, and its pricing data will be derived from Genesis Trading, Cumberland, and Circle Trade.
The new index is a product of MVIS, which is a subsidiary of the VanEck Associates Corporation. VanEck applied in the summer of 2018 to the US Securities and Exchange Commission (SEC), to launch a bitcoin exchange traded fund (ETF), and specified at that time that MVIS would supply the pricing index.
The decision to use pricing data from OTC desks is likely in response to SEC's concerns over the possibility of market manipulation on public cryptocurrency exchanges, upon which overly volatile price indices could affect the stability of the bitcoin ETF product.
VanEck hope that the reliability of pricing data from OTC desks will create a bitcoin price index that is not easily susceptible to market manipulation, which may sway the SEC in favor of approving VanEck’s bitcoin ETF product.
As CryptoGlobe reported only yesterday, MVIS has also been in cooperation with Amun AG to produce "Amen Crypto Basket ETP (ticker: HODL), which derives its value from the value of the five cryptoassets in the Amun Crypto Basket Index (ticker: HODL5), and is due to launch tomorrow on the SIX Swiss Exchange.
The SEC has broached the issue of market manipulation when discussing their decision to postpone VanEck SolidX ETF, as has the Office of the New York State Attorney General during its recent (September) review of a selection of responding cryptoasset exchanges, stating:
The industry has yet to implement serious market surveillance capacities, akin to those of traditional trading venues, to detect and punish suspicious trading activity.