By the end of this year the US Securities Exchange Commission (SEC) could have made a decision on whether or not to approve the VanEck Bitcoin Exchange Traded Fund (ETF).
If approved the VanEck Bitcoin ETF will be the world’s first cryptocurrency ETF to trade on a regulated exchange.
9 crypto ETFs have been rejected by the SEC in this year – but VanEck’s case is different and compelling.
The New York investment management firm is extremely confident it can win over the SEC.
“VanEck has a 60+ years relationship with the regulators, and we speak regularly with the regulators,” said VanEck director of Digital Assets Strategy Gabor Gurbacs in an interview this month on CNBC Africa.
He outlined the following 4 reasons why he believes the VanEck ETF will be approved.
- It’s a physical Bitcoin ETF – staying true to the underlying Bitcoin.
- It’s fully insured against thefts, hacks or losses.
- The ETF’s Bitcoin pricing comes from VanEck’s fully regulated entity, MVIS Indices.
- The ETF is institutionally oriented with 25 Bitcoin per basket.
ETF could attract ‘billions’
In the same interview Gabor Gurbace predicted the Bitcoin ETF, if approved, will attract around US$1 billion in investments within days of trading.
The investment flowing from institutional investors, who do not want to take risks by investing in bitcoin through less secure and safe spot markets.
“Our gold ETFs are already in a few billion dollars range,” said Gurbacs.
“I wouldn’t be surprised if a bitcoin ETF gets in a few billion dollars range.”
VanEck’s link to Swiss ETP approval
This month Europe’s fourth largest stock exchange, the SIX Swiss Exchange, approved the listing of the Amun Crypto Exchange Traded Product (ETP).
The ETP tracks the Amun Crypto Basket Index (HODL5) which is based on the performance of the top five cryptocurrencies.
Although the listed investment is officially labelled an ETP, it operates almost identically to an ETF.
When a buyer purchases the ETP, a market maker buys the underlying cryptocurrency based on the HODL5 index allocation.
The Amun Crypto Basket Index is maintained by VanEck’s MVIS Indices.
As mentioned earlier in this article, the VanEck’s Bitcoin ETF, will use MVIS Indices to price its underlying Bitcoin.
Many observers believe this European ETP approval will bode well for VanEck’s ETF application.
THE DATES TO WATCH:
29/12/18 – First Deadline:
SEC will either approval, reject or delay.
27/02/19 – Final Deadline:
If SEC choosing to delay, Friday 27th 2019 will then be the final deadline by which commissioners must either approve or reject.