VanEck Launches Bitcoin Product For Institutions
Earlier Tuesday, VanEck Securities Corp. and SolidX Management LLC, two pro-crypto firms that are behind a leading Bitcoin exchange-traded fund (ETF) application, revealed that they were going to be proactive, launching a workaround product.
According to Bloomberg, they said that by utilizing a certain rule of a historical securities act, the duo would be able to issue shares in the VanEck SolidX Bitcoin Trust to qualified institutional investors. VanEck’s head of ETF product, Ed Lopez, is hopeful that institutional demand for Bitcoin will materialize in demand for this new “clear” product.
This new product, which is seemingly unnamed, is very similar to a product that exists from Grayscale, a cryptocurrency investment company that manages over 1% of all Bitcoin in circulation.
Not An ETF, Yet Still Bullish
When this news spread, many were quick to call it an “ETF”, one that was “limited”, but an ETF nonetheless. Indeed, if you puruse the headlines outlining this announcement, the phrase “Limited ETF” is used incessantly.
But, according to the general counsel at Ethereum decentralized finance application Compound, Jake Chervinsky, the ETF tag of this new product is misleading. Chervinksy pointed out in the below tweet claims that the “limited ETF” classification is a “cute marketing strategy”, as this product from VanEck is inherently similar to Grayscale’s Bitcoin Trust (GBTC).
This is misleading. The VanEck SolidX Bitcoin Trust is *not* an ETF. It looks exactly like the Grayscale Bitcoin Trust, which was launched almost six years ago. Calling this a “limited ETF” is a cute marketing strategy, but that’s about it. Calling it a full ETF is just wrong. https://t.co/e5kyeAE4gC
— Jake Chervinsky (@jchervinsky) September 3, 2019
Pro-Bitcoin economist Alex Kruger followed suit, joking that it’s like if one purchase a bicycle and called it a “limited motorcycle”. He added that this product is only available for “institutions with over $100 million under management, registered broker-dealers, and banks”.
This bitcoin trust people are erroneusly calling a “limited ETF” is only for institutions with over $100 million under management, registered broker-dealers, and banks. Can thank the SEC for protecting the little guy. Coinbase and Kraken are clearly much safer than an ETF. pic.twitter.com/yNWzKfsXG8
— Alex Krüger (@krugermacro) September 3, 2019
Despite this, many have still asserted that the release of this Trust will only aid Bitcoin’s price recovery. Kruger wrote in a later tweet that this is bullish, with the product giving Bitcoin a higher probability of breakout out of the current range to the topside.
Indeed, with Grayscale’s Bitcoin Trust currently housing hundreds of thousands of BTC, it would be nonsensical to claim that such over-the-counter ETF-like products do not catalyze capital inflows into cryptocurrency markets.
More Institutional Investment Mediums
The launch of this institutional-only product comes ahead of the launch of Bitcoin futures by Bakkt.
As reported by this outlet previously, Bakkt will be launching its flagship product on September 23rd, two weeks after it starts storing BTC for clients during this week. The Wolf of All Streets, a prominent DJ and trader, recently argued, that the launch of the exchange will “be “arguably the most bullish event for institutional investors in the history of Bitcoin”.
Photo by Samson on Unsplash
