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VanEck and SolidX Will Offer Institutional Investors a Bitcoin ETF – Sort Of

A fresh report from The Wall Street Journal says that Bitcoin exchange-traded funds (ETFs) may soon become reality. According to the story, both VanEck Securities and SolidX Management are now planning to offer a special version of a Bitcoin ETF.

Will VanEck and SolidX launch a limited Bitcoin ETF?

Both VanEck and SolidX have long sought to launch a Bitcoin ETF. Specifically, a crypto ETF would supposedly allow institutional capital to invest in the crypto sector. Nevertheless, regulatory uncertainty has hitherto prevented any substantial progress for a US crypto ETF. 

Now, both VanEck Securities and SolidX Management are reportedly looking to use a technical loophole to issue a Bitcoin ETF. According to the article from The Wall Street Journal, they will use a rule exempting shares of a limited Bitcoin ETF from securities registration.

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This would mean that the shares will only be sold to certain institutional investors. However, this will likely not pose a problem for attracting buyers – as the institutional appetite for Bitcoin has proven strong.

This most recent report alleges that VanEck and SolidX plan to start selling shares on September 5th. Specifically, this will be done under the “United States Securities and Exchange Commission’s Rule 144A”. 

SEC loophole seemingly permits this type of “ETF”

This rule permits the sale of privately placed securities to so-called “qualified institutional buyers”. Through using this loophole, or exemption, SolidX and VanEck will reportedly be able to offer shares to some buyers. 

The VanEck SolidX Bitcoin Trust – this Bitcoin ETF – can supposedly be offered to institutional investors, but not to retail investors. It is unclear exactly how the SEC would react if SolidX and VanEck go through with this plan.

However, it is clear that VanEck and SolidX have grown weary over the SEC’s inability to green-light a crypto ETF over the past year. The two parties began their lengthy listing process back in 2018, and have since seen support.

For example, one SEC Commissioner – Hester Peirce, since nicknamed “Crypto Mom” – disagreed with the SEC’s refusal to list a crypto ETF so passionately that she published a public dissent of the SEC’s decision.

It remains to see how this potential Bitcoin ETF fares. If it is successful, it is quite likely that similar “limited” crypto ETFs may also spring up in its wake. Naturally, we will continue to cover this story as it develops.