Cryptocurrency mining platforms sit on racks at a Bitfarms facility in Saint-Hyacinthe, Quebec, Canada, on July 26, 2018. Bitcoin is up more than 30 percent in July, with security and regulatory concerns plaguing the virtual currency. for much of this year.
Photographer: James MacDonald / Bloomberg
Photographer: James MacDonald / Bloomberg
For years, regulators have crushed hopes for an exchange-traded Bitcoin fund by worrying about everything from market volatility and industry manipulation to thin liquidity.
Like Bitcoin itself, publishers keep fighting back.
VanEck Associates Corp. A new effort has begun to launch an ETF that tracks the world’s largest digital currency, according to a Wednesday filing with the U.S. Securities and Exchange Commission. The VanEck Bitcoin Trust is said to reflect the performance of the MVIS CryptoCompare Bitcoin Benchmark Rate.
It’s a bold move for the New York-based company. There have been multiple applications for cryptocurrency tracking ETFs over the years, and the SEC has denied them all.
VanEck may be betting on a change in SEC leadership – with Jay Clayton Stepping down as chairman – coupled with growing Bitcoin adoption on Wall Street, analysts say, has increased the likelihood of regulatory approval.
“All indications from the SEC are that a bitcoin ETF still faces a tough battle, ”said Nate Geraci, president of the ETF Store, an investment advisory firm. “That VanEck has the confidence to apply for a Bitcoin ETF may indicate shifting positions within the SEC. Obviously, a key to watch as this drama unfolds is who President Biden taps into as SEC chairman. “
VanEck’s filing comes within a week of Bitcoin continuing to hit record highs. The world’s largest digital asset is up about 300% this year, to grab the attention of some of Wall Street’s most famous investors, including Paul Tudor Jones, as well as major companies such as PayPal Holdings Inc.
As crypto fans see the rally continue, many are also aware that the high-profile wave could receive more attention. The new SEC chairman may be softer than Clayton, but President-elect Joe Biden has nominated Janet Yellen as Secretary of the Treasury. In the past, she has described Bitcoin as a “highly speculative asset” and not as a “stable store of value.”
“By filing now, it will restart the clock for a review when there will be new SEC membership and leadership,” said Todd Rosenbluth, director of ETF research for CFRA Research. “However, I think the SEC has made it clear they have concerns that need to be addressed.”
Read more: Bitcoin faces regulatory oversight after record-breaking rally
According to the filing, VanEck’s ETF plans to hold Bitcoin and will value its shares based on prices contributed by exchanges that MV Index Solutions GmbH believes represent the top five exchanges for the cryptocurrency.
Bitcoin was trading 0.3% lower around $ 28,800 as of 7:49 a.m. in New York.
Such an ETF “could be considered bullish for Bitcoin as it broadens the universe of investors who might be aware of Bitcoin,” said Everett Millman, financial expert at Gainesville Coins.
(Updates to expand party quote, add prices.)