Van Eck and SolidX have announced they will commence selling shares in their Bitcoin Trust to qualified institutional buyers outside the US in coming days.
The companies have been working to for more than a year to obtain a green light from the SEC to sell a bitcoin ETF directly to retail.
They appear to moved on from that for now, but write, “In the event the SEC approves the Trust’s registration of public shares, i.e. an Exchange Traded Fund (ETF), the 144A issued Shares may benefit from public market resales.”
For various reasons, including news of widespread manipulation, crypto markets have calmed considerably since VanEck Solid X and a spate of others began seeking SEC permission to offer “institutional-grade” crypto derivatives to the public.
Van Eck CEO Jan van Eck admits that, under current circumstances, “Institutional demand for bitcoin exposure is uncertain,” but attributes this mainly to regulatory delay. “Institutional quality vehicles simply have not, to this point, have not been readily available,” he says in the release.
The company is moving now to serve remaining institutional appetite, comments by SolidX CEO Daniel H. Gallancy suggest:
“As the first bitcoin product in the U.S. with standard ETF creation and redemption and established clearing and settlement processes, institutional investors can finally gain exposure to bitcoin within a familiar context.”
This VanEck Solid X product offers the following features, according to the release:
“The shares will provide institutional investors access to a physically-backed bitcoin product that is tradeable through traditional and prime brokerage accounts. The Shares are the first institutional-quality, cleared product providing exposure to bitcoin and enabling a standard ETF creation-and-redemption process.”
Shares will be insured against loss by hacking and NAV (net asset value) will be based on the MVIS Bitcoin US OTC Spot Index, “designed to track price feeds from major OTC bitcoin liquidity providers.”
A paragraph at the bottom of the release addresses a restriction on trading the Van Eck Solid X Bitcoin Trust shares in the US:
“The Shares have not been registered under the Securities Act or any state securities laws, and unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws.”
VanEck has been contacted to clarify this restriction and comments will be appended if and when received.
Besides concerns about market manipulation in crypto, a sticking point regarding approving a battery of proposed Bitcoin ETFs at the SEC has been the agency’s concerns about sourcing a reliable spot price for Bitcoin.
Regarding these concerns, Van Eck writes:
“Utilizing OTC prices to value bitcoin enhances price transparency and the institutional quality of the offering.”
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