VanEck Deliberates Bitcoin ETF With SEC After Private Meeting

VanEck issued a reply to the U.S. Securities and Exchange Commission over Bitcoin exchange traded funds (ETF) in a letter that was revealed on the regulator’s official website.

The letter comes as a public release/evidence regarding the outcome of an Oct. 9 meeting that was held behind closed doors, and away from the public eye. The meeting included the SEC, SolidX and VanEck, the latter pair which is popular Bitcoin ETF hopefuls and advocates.

The idea of a tailored cryptocurrency exchange-traded fund is a great appeal and advantage which holds significant importance in the clamor for Bitcoin mainstream adoption. The concept of a Bitcoin ETF would allow and provide a platform for wary or untrusting investors to become involved in the cryptocurrency market without actually really buying digital assets. Approval of Bitcoin ETF as part of securities would allow investors to safely test waters they consider dangerous, under a regulatory body.

SEC published VanEck’s slide deck on its website exactly two weeks after its undisclosed meeting. The management firm had addressed its letter to the director of SEC’s division of investment management, Dalia Blass, talking on the five major issues that the regulator had earlier raised, which were: liquidity, valuation, arbitrage, custody and potential manipulation.

The management firm, in its addressed letter, explained that the previous issues which could prevent a Bitcoin ETF approval had been promptly dealt with, with the firm explicitly tackling each point of conflict. The slide deck released by SEC revealed VanEck’s detailed address which explored in detail its collaboration and working relationship with SolidX Partners since last year.

VanEck has gone through great pains to ensure all that is needed for the proposal to go through is in place, as its slide deck showed the firm had placed the proposed ETF’s price at 25 Bitcoins, (worth about $170,000 in total) in a bid to allay SEC’s fears of capital allocation.

A number of experienced analysts believe VanEck’s proposal still faces a difficult battle though, and might not be close to approval just yet. Apart from to the same pitfalls the Winklevoss twins had before their ETF turndown, SEC Commissioner Kara Stein believes the issue is a lot more difficult. He stated that:

“At the end of the day, whatever fund presents a concept to us will have to show how they can get accurate valuations, how they make sure that there is physical custody, and how to make sure that there is adequate liquidity, especially in a 40 act fund context, where investors can get the money when they need their money.”

While Stein may have appeared to reckon the gathering, investors and traders are left with no option but to fold their arms and observed. In contrast to the popular belief and expectation, the crypto market has seen a reasonable share of breakthrough in the past weeks. In the wake of the previous stagnancy of the crypto industry, traders have resolved to spinning in a different dimension — a factor catalyzed mainly by the bearish nature of the market.

© 2018 Benzinga does not provide investment advice. All rights reserved.

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