VanEck’s “Bitcoin ETF”: A big failure?

Jan Van Eck, CEO of VanEck Associates had applied for the approval of a Bitcoin ETF known as VanEck SolidX Bitcoin ETF and this proposal has been one of the most prolonged applications that were filed with the Securities Exchange Commission in the U.S. The SEC Chairman said that they are turning positive towards the formation of an ETF, but the approval is still far away.

VanEck, however, decided to go ahead and establish a trust fund named “limited ETF.” This platform offered by the company is not available to the public, but it was available for institutional investors to use. No matter how wealthy an individual is, they can’t buy the product. Along with this, only those institutional investors are allowed to purchase this with a value of $100 million and more.

The trust fund was criticized for its misleading name, and SEC, as well as people, raised questions about it. But there are places where it acts as an ETF but for institutional investors only. Van Eck said that the product would not be traded in association with any National Stock Exchange, and it will only be open to “qualified investors.”

Van Eck talked about the regulatory issues faced by the cryptocurrencies and by traditional exchanges and how VanEck Associates is trying to fill in the gap between the traditional finance sector and unregulated cryptocurrency sector.

VanEck’s attempt to demonstrate a demand for a Bitcoin ETF went wrong and not at all how they planned. In the initial stage, the Bitcoin ETF did terrible by gathering net assets of just over $40,000. This makes it around 4 BTC for the management so far.

The results are disappointing as compared to what the company and the faithful crypto enthusiasts were expecting from a Bitcoin ETF. Industry lawyer Jake Chervinsky argued that the product and the company tried to fool the people as it does not represent a legal Bitcoin exchange-traded fund. An ETF is still under consideration by the U.S. Securities and Exchange Commission.

Critics have been sticking with their statement of calling this “not a real Bitcoin ETF” because the proposed rule change by VanEck was to allow investors to hold Bitcoin without actually buying one. This proposal was rejected by the SEC again and again because of the suspicious way in which it would have worked.

An economist, Alex Kruger, tweeted about how this fund is just a lousy launch of a product that is not needed in the market. On the other hand, Bitcoin bull Tom Lee responded by saying that it’s too early to judge the success of the product as everything takes time to pick up its pace.

For now, we can only hope for better days and high soaring prices for Bitcoin in future. Bitcoin ETF might act as the push for the BTC price, but this may take some time to come true despite the statements made by SEC Chairman Jay Clayton.

Malaki Braydon
Malaki Braydon
Braydon has been into the crypto and blockchain space from the past 7 years. Based in New York City, Braydon has completed his masters from Kingsborough Community College.

Leave a reply

Please enter your comment!
Please enter your name here