VanEck and SolidX are reportedly looking to launch a limited Bitcoin Exchange Traded Fund (ETF) for institutional clients via a U.S. Securities and Exchange Commission (SEC) exemption. The move would see the first-ever iteration of a Bitcoin ETF in the United States albeit one only available to certain institutional traders. Meanwhile, VanEck and SolidX still have a pending Bitcoin ETF application before the SEC.
Limited Bitcoin ETF Via SEC Exemption
According to the Wall Street Journal (WSJ), VanEck and SolidX are floating an arrangement that could potentially lead to the emergence of a Bitcoin ETF in the U.S. The plan involves a workaround that allows the selling of shares in a limited Bitcoin ETF to institutional buyers.
The shares of the limited Bitcoin ETF — the VanEck SolidX Bitcoin Trust, would be sold via rule 144A. This particular SEC Rule could, in theory, allow both companies privately sell BTC ETFs to qualified institutional clients.
Reports indicate that the limited BTC ETF will go on sale by Thursday (September 5, 2019). The move is part of a busy period for VanEck which has also seen the restructuring of three other ETFs.
VanEck says they want to eliminate US tax burdens for their investors and also create dividend investment avenues.
A Path to Retail Bitcoin ETF Realization?
The VanEck/SolidX plan could provide real-life proof of the potential viability of a Bitcoin ETF. Thus far, the U.S. SEC has refused to grant approval to any BTC ETF filing.
Back in mid-August, the VanEck/SolidX filing was among the BTC ETF proposals delayed by the SEC. between September and October, the Commission will have to provide a final approval or rejection response to these applications.
The SEC is yet to issue a statement on the plan to issue limited Bitcoin ETF by VanEck/SolidX. As for BTC ETFs in general, the Commission’s stance has remained staunch against grating any approvals.
For the SEC, concerns over, volatility, price manipulation, and custody are among some the reasons for the total rejection of Bitcoin ETFs. As reported by Blockonomi, crypto stakeholders remain unfazed by the lack of progress in this regard, citing other positive developments in the space.
Bitcoin a More Mature Asset Class
For crypto proponents, Bitcoin constitutes a more mature asset class in 2019 than in previous years. There has been a slew of positive developments in the industry since the turn of the year.
These advancements have come even after the year-long bear market of 2018 that saw crypto prices plummet by more than 80% across the market. Amid the tailwinds created by these improving fundamentals, the focus on Bitcoin ETFs hasn’t been as pronounced as they were in 2018.
Back in February, SEC Commissioner Robert Jackson hinted that an approved BTC ETF was only a matter of time. For stakeholders like Tom Lee, the top-ranked cryptocurrency doesn’t need an SEC-approved BTC ETF to finish 2019 on a high note.
Potential Impact on Bitcoin Price Action.
The VanEck/SolidX announcement is coming at a time when bitcoin has crossed the $10,000 mark after five days of struggling in the mid-$9,000 region. With summer over, bulls will be hoping that the sluggish period is at an end and BTC can experience a significant upward price push.
Trading volume has contracted over the recent months, even reaching a five-month low. However, Tuesday (September 2, 2019) did see fresh Tether USDT printing, perhaps in anticipation of a trading volume surge.
Bitcoin is up by close to 180% since the start of the year with several forecasts calling for a new all-time high before the end of 2019.