VanEck in partnership with SolidX is again making the attempt to get the Bitcoin ETF approved by SEC after failing the first time. However, these physically-backed ETFs will cost a hefty price of about $200,000 that will be targeting the institutional investors.
Bitcoin ETF with a share price of $200,000
Bitcoin (BTC) Exchange Trading Fund (ETF) might see the daylight again. In its latest attempt, Van Eck Associates Corp. along with SolidX Partners Inc. has again filed for a Bitcoin ETF to the US SEC.
According to Bloomberg, these funds will be physically-backed that means it will be holding actual bitcoins. Furthermore, it will be insured against the theft and loss of the particular cryptocurrency. However, it is going to cost you big.
In comparison to most of the ETFs that launch with a double-digit share price, this fund will be having the share price of about $200,000 in order to target the institutional investors. This would further bring a shift from the usual individual investors to Institutional ones in ETF industry.
In January, the SEC asked the companies to go about a number of applications. Also, SEC rejected the Bitcoin Trust ETF of Winklevoss brothers last year.
According to the CEO of SolidX, Daniel H. Gallancy, this time they have made the required changes of increased share price and using regulated trading firms for price basis in the new and joint request.
Bloomberg quoted Gallancy commenting:
“Based on various comments, it seems that regulators are concerned right now about having an ETF that is available to retail investors. We think that will change over time, but right now a good place to start is with a product geared purely toward institutional investors.”
Eliminating the concern of high volatility
Last year, when CME Group Inc. and Cboe Global Markets Inc. launched the Bitcoin futures, Bitcoin ETF looked like it could be a reality. It has been speculated that the agency just might approve the funds that are linked to those financial instruments that are being traded on prominent exchanges.
However, that were just that, speculations as nothing came to fruition. SEC cited the high volatility one of the prime reasons along with lack of knowledge about pricing and trading in the market, the reason behind not approving the ETF option.
Now, both the companies, VanEck and SolidX are addressing these concerns by using those indexes to use the basis of price for “VanEck SolidX Bitcoin Trust” that tracks over-the-counter trading by US-based institutions that are further regulated by the CFTC.
For the index compiling, VanEck’s subsidiary MVIS is assigned that will also publish the price updates. With over $45 billion assets and more than 70 exchange-traded products managed by VanEck along with the New York-based SolidX which is a financial technology company, Bitcoin ETF might just become the reality this time.
Through a cold-storage solution, private keys will be kept offline while “funds will be insured one-to-one by a syndicate of insurers.”
Right now, Bitcoin (BTC) is at $7,539 with a 24-hour loss of about 0.93 percent.
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