Alternative Investments/Digital Assets: Fresh Bid By VanEck For A Bitcoin ETF
Changes at its helm raise hopes for a change of heart at the SEC.
VanEck filed an application with the SEC last week for a VanEck Bitcoin Trust. The SEC has removed unmoved thus far and turned down all previous applications for launching a bitcoin ETF. VanEck itself retracted its previous ETF application in September 2019.
The SEC has cited reservations regarding bitcoin’s volatility, price manipulation, and thin volumes.
VanEck hoping to get lucky
VanEck’s bitcoin fund is dubbed the “VanEck Bitcoin Trust” and it would track the performance of the MVIS CryptoCompare Bitcoin Benchmark Rate. (THE DAILY HODL)
Certain circumstances may have emboldened VanEck to throw in its hat in the bitcoin ETF ring yet again.
One, bitcoin has raced higher in recent months on the back of rapid adoption by corporates, fintech platforms, and institutions. As this is being written, bitcoin is trading at $30,789.50 – down from a new all-time high above $34,000.
“There’s no denying that bitcoin has proven itself as an established and top-performing asset,” said Eric Demuth, CEO of digital asset broker Bitpanda, to CNBC. “Bitcoin’s value grew over 300% last year as more institutional investors took that leap to embrace digital currencies.”
“We’re seeing it emerge as a part of the recommended allocation strategy for institutional investors and investment banks,” he added.
Greater participation by sophisticated institutional players may give the SEC some comfort that speculators would be unable to manipulate the market to the detriment of retail investors.
SEC may soon be more bitcoin-friendly
Meanwhile, SEC chairman Jay Clayton stepped down last week and this could improve the chances of the SEC’s approval of a bitcoin ETF.
Another senior SEC bitcoin naysayer, Dalia Blass, the director of the division of investment management, will also step down this month.
“That VanEck has the confidence to file for a Bitcoin ETF might indicate some shifting viewpoints within the SEC,” said Nate Geraci, president of the ETF Store, an investment advisory firm, to Bloomberg. “Clearly, a key to watch as this drama continues unfolding is who President Biden taps as SEC chair.”
A bitcoin ETF could increase the participation from retail and institutional investors that so far have been sitting on the fence.
Related Story: Bermuda Green-Lights World’s First Bitcoin ETF
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