Two financial firms that have previously had efforts to issue a bitcoin exchange traded fund (ETF) blocked by US regulators are to launch a similar, but more limited, option this week.
VanEck Securities and SolidX Management tried in the summer of 2018 to register the VanEck SolidX Bitcoin Trust ETF, but the Securities and Exchange Commission (SEC) has continued to delay its decision over concerns that manipulation in the primary market could place inexperienced retail investors in danger of significant losses.
However, VanEck and SolidX announced on Tuesday (September 3) that "the VanEck SolidX Bitcoin Trust (the Trust) will issue shares (the Shares) to Qualified Institutional Buyers (QIBs) in accordance with Rule 144A under the Securities Act of 1933, as amended (the Securities Act)." These shares will "provide institutional investors access to a physically-backed bitcoin product that is tradeable through traditional and prime brokerage accounts."
Jan van Eck, the CEO of VanEck, said:
Institutional demand for bitcoin exposure is uncertain, because institutional quality vehicles simply have not, to this point, been readily available. We’re introducing a solution for institutions that fits within their operational processes and the current regulatory framework.
But financial lawyer Jake Chervinsky took to Twitter to clarify some details about the offering. He said that it was not an ETF and calling it a "limited ETF", was just a "cute marketing strategy".
This is misleading. The VanEck SolidX Bitcoin Trust is *not* an ETF. It looks exactly like the Grayscale Bitcoin Trust, which was launched almost six years ago. Calling this a "limited ETF" is a cute marketing strategy, but that's about it. Calling it a full ETF is just wrong. https://t.co/e5kyeAE4gC— Jake Chervinsky (@jchervinsky) September 3, 2019