There would be a greater likelihood of approval thanks to the changes in the SEC directive. The ETF would reflect the performance of the MVIS CryptoCompare Bitcoin benchmark rate.
VanEck Associates Corp. re-registered the application to launch the Exchange Traded Fund (ETF) with the US Securities and Exchange Commission (SEC). This fund will track the world’s largest cryptocurrency, Bitcoin (BTC).
The global investment manager made a presentation to the SEC, in which they stated that the new ETF will be known as VanEck Bitcoin. That financial instrument would reflect the performance of the MVIS CryptoCompare benchmark rate, an index that VanEck launched in 2017 in partnership with CryptoCompare.
This action would prove that VanEck is betting that the change in leadership of the SEC, whose chairman Jay Clayton recently resigned, will contribute to a greater likelihood of approval of its ETF proposal.
According to Nate Geraci, president of investment advisory firm ETF Store, “all indications from the SEC suggest that a Bitcoin ETF still faces an uphill battle.” He says that “VanEck’s confidence in filing a Bitcoin ETF could indicate some shifting views within the SEC. A key to watch is who President-elect Joe Biden appoints as the leader of the SEC.”
The VanEck Vectors and VanEck Mutual Funds ETFs represent the flagship investment offerings of New York-based Company VanEck Associates Corp. Assets Under Management (AUM) were valued at USD 49 billion until 2019.
SEC Has Rejected ETF
An Exchange Traded Fund (ETF) includes a collection of securities, such as stocks, which an underlying index typically tracks. The proposal is to offer an index to track the price of Bitcoin as a stock investment option. Stock exchange participants could buy Bitcoin shares without having to trade cryptocurrencies on a Bitcoin exchange. Of course, the SEC is the agency in charge of approving an ETF in the US market.
VanEck has already tried several times to launch an EFT after filing with the SEC, but they have yet to be successful.
On another occasion, VanEck, in conjunction with SolidX, applied for an exemption to offer the shares of its VanEck SolidX Bitcoin Trust to institutions such as hedge funds and banks, but not to retail investors. This allowed them to achieve the consolidation of the project.
The Winkelovoss twins also previously tried the possibility of creating an ETF (BATS BZX), but the SEC denied it twice. The Commission claimed that there are not enough tools to identify and prevent Bitcoin fraud and manipulation. For that reason, they consider it a risk, from which they must protect investors.
However, Commissioner Herster M. Pierce, a member of the SEC’s Decision-Making Committee, publicly stated her disagreement with this decision to deny BATS BZX’s proposal as an ETF.
She believes that she would ignore the decision and approve the application in scenarios where the proposals are under the established norms, there is a good opportunity to institutionalize Bitcoin, and the certainty that the rejection of the request would hinder innovation.
By Alexander Salazar