VanEck/Solidx Joins The Race To Launch First Bitcoin ETF

VanEck/Solidx now joins the race with Bitwise:

The VanEck/SolidX proposed Bitcoin ETF has now officially entered the SEC register. VanEck/Solidx now joins the race with Bitwise who got registered a week earlier to launch first bitcoin ETF of U.S.

The VanEck/SolidX proposal was initially filed last year but was withdrawn due to the U.S. government shutdown in January 2019. If the proposal was not withdrawn, the SEC would have had to make a final decision by February 27th. The application was re-filed at the end of January 2019.

As per the usual process, starting February 20 to March 13, SEC will entertain public comments about the proposal before conducting a review. The decision to either approval, rejection or a subsequent extension will be announced on April 5th.

Crypto enthusiastic have been long waiting for SEC to get Bitcoin ETF approved:

So far, the SEC has rejected almost every bitcoin ETF proposal citing concerns that the proposals to track ETF index solely from cryptocurrency exchanges or relying on the Bitcoin futures market price alone are not reliable.

The proposal submitted by VanEck and Bitwise differs from other previous attempts. To address SEC concerns on finding reliable price for the index, VanEck proposes using data from over-the-counter (OTC) market to calculate Bitcoin base price, which is said to be bigger than the cryptocurrency exchange market in terms of volume and trading activity.

As per the report by Tabb group published last year, the estimated daily bitcoin in OTC could be upward of $12Billion, i.e. 2-3 times more than the volume done on exchanges. Therefore, prices of BTC in OTC are difficult to manipulate and can be argued as a good reference point. [More on this here].

On the other hand, Bitwise proposes ETF index be monitored using verifiable bitcoin trading volume from a large number of cryptocurrency exchanges with the aim of better representing the market price.

Expected earliest decision:

Both these proposals differ from previous attempts made by ProShares, Direxion, Gemini, and GraniteShares. It’s yet to be seen if any of the two proposals will see any liking in the hearts of the SEC.