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VanEck offers limited Bitcoin ETF for institutional investors

Samson Ononeme | Sep. 3, 2019
VanEck offers limited Bitcoin ETF for institutional investors

Bitcoin ETF by VanEck and SolidX is finally here – albeit in a limited fashion. Both firms which have received several delays to their requests for Bitcoin ETF will now use an exemption to launch a limited version of such instruments to institutional investors.

September 3, 2019 | AtoZ Markets - While the United States Securities and Exchange Commission (SEC) has been delaying its decision on Bitcoin ETFs (Exchange-traded Funds), two firms, VanEck Securities Corp. and SolidX Management have decided to take things into their own hands.

VanEck/SolidX to sell ‘limited version’ of Bitcoin ETF to institutional investors

The Wall Street Journal reported the news on Tuesday, that the two Investment management firms are going to launch a “limited version” of a crypto ETF on Thursday. While this loophole will provide the two firms the opportunity to employ a rule that excludes the shares from securities registration, it will also mean that they will only be made available to quite a few institutional investors. 

As a reminder, the SEC recently deferred its decision on the Bitcoin ETFs proposed by VanEck/SolidX, Bitwise Asset Management, and Wilshire Phoenix. The regulator is expected to announce its decision later this month and in October.

“The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change,” the SEC explains.

Nevertheless, VanEck Securities and SolidX Management are now trying to bypass the regulatory hurdles by employing the SEC’s Rule 144A. The rule allows the sale of privately placed securities to "qualified institutional buyers" with shorter holding periods—six months or a year.

VanEck and SolidX reportedly hope that this limited version will act as a proof that a bitcoin ETF can work.

The SEC has been treading cautiously regarding its decision on bitcoin ETFs. Earlier in 2019, the Commissioner of SEC, Robert Jackson expressed his optimism that crypto ETF proposal that would will “eventually” meet the standards laid out by the SEC.

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