For Wall Street, Bitcoin's ETF decision could answer "$ 1 billion"


"I would like to know the answer to your $ 1 billion question." Seriously. "

This is Gabor Gurbacs, director of digital asset strategy at the VanEck investment management company in New York, the company has made late titles for a proposed bitcoin exchange fund (ETF). No lightness in the arena, however, VanEck's proposal was deemed by some to be the best shot for being approved by the US Securities and Exchange Commission (SEC).

Indeed, all eyes are on the SEC in the wake of its comment period, with a possible yes or no – or a further delay – expected by Friday. Even so, Gurbacs is cautious about what to expect from the SEC in the coming months.

When asked what he suspected would be the result, he postponed.

He told CoinDesk:

"Unfortunately, I do not know the answer, I know we have dealt with issues related to the structure of the market and this is an opportunity for regulators to bring bitcoins under existing frameworks and protect investors. " [19659007] However, if the measure fails, it will not be due to lack of effort.

For one, VanEck's specific proposal came about three years ago when SolidX, a New York-based financial technology company, began working for the first time to bring a bitcoin ETF to market.

Since a partnership between VanEck and SolidX, announced at the beginning of June, comments on the subject have significantly increased in favor of approval. And it is not only the encrypted investors who push the concept, but also the economists, CEOs, financial analysts and even a commissioner of the same SEC (although this was ultimately implemented in support of a different proposal of bitcoin ETFs).

The difference

I know what makes the ETF VanEck-SolidX bitcoin unique? Put simply, it is different from past efforts such as the recently rejected Winklevoss ETF.

As Gurbacs explained, "it is an insured product". As such, physical bitcoins that support ETF actions would be covered in the event of "thefts and hacks and losses of all kinds".

This, however, is not the strength of Phil Bak, former CEO of the New York Stock Exchange and current CEO of exponential ETFs.

The way Bak sees, the insurance aspect of the VanEck / SolidX proposal may be useful but "could also open a can of worms and other questions", explaining that "[the SEC is] will always have some hesitation in supporting that everything is guaranteed or ensured in any scenario. "

No, the very" elegant "solution in Bak's mind that is unique and ingenious on the part of VanEck and SolidX is how it is designed to eliminate unaccredited investors.

Bak explains:

"When you launch a new fund, you can arbitrarily set the initial NAV and the initial exchange price where you want and get around $ 20, $ 25 … What they did, they announced that The price is $ 200,000, which means you can not buy a fractional share.It means that the minimum notional amount that an investor can put in the bitcoin fund will be $ 200,000, which means by definition anyone is trading the fund is an accredited investor. "

And Gurbacs would completely agree.

In an interview with CoinDesk last week, Gurbacs stated that the ETF was "institutionally oriented".

"Today, bitcoin markets are still 90-95% retail and institutions are looking for a way to enter these markets so the physical ETF we have adapted to institutions," he noted.

Others see the ETF as a possible path to future products around cryptography, including Eric Balchunas, senior analyst at the ETF at Bloomberg Intelligence.

Balchunas thinks of VanEck- L & # 39; ETF SolidX is the "bridge between not approving and approving a regular ETF with normal primetime yield with a stock price that seems more normal", adding that this is one of the main reasons for which the SEC could consider the prospect to approve it as a "small step towards a real ETF."

A long way forward

Apart from these differences, if the SEC actually approves the proposed ETF remains to be seen.

For his part, Balchunas predicted a 5-10% chance to see the VanEck / SolidX proposal enlightened by the SEC this year

To be clear, the proposal is currently in a phase attended by all new ETF – crypto or other – in which the partnership exchange (in this case, Cboe BZX Exchange) presented a "rule change" with the SEC to be included in the exchange list.

According to Bak, also with the approval by the SEC on this front, the partner companies "It would still need to get the SEC's approval from the Corporate Finance Division", adding: [19659027] "There is a whole set of approvals that would still need to come."

Given that, in his view, a "general approval" is highly unlikely at the beginning, Bak emphasizes that the SEC has "the possibility of extending these things over longer time intervals", as was the case for five other bitcoin ETF proposals in recent days.

In fact, in light of all the comments that were triggered by the VanEck-SolidX bitcoin ETF, the proposal remains in the initial stages of "registration", which although Gurbacs insists has addressed all the relevant concerns related to "protection and compliance" of customers, price and validation, liquidity and some other important pending issues "does not indicate a regulation bitcoin ETF will soon arrive in the United States

" I think what most people do not understand is that there is a formal process in which you go back and forth with regulators … They could say, 'Hey, we work on this particular topic like the price,' and they will call us and we will look at our indices & # 39 ;, has said Gurbacs to CoinDesk, adding:

"We think we've done the job and the work is good enough to do, but again … no one will know the date but the SEC. "[1 9659007] Bull and bear image via Shutterstock

The leader in blockchain news, CoinDesk is a media reference point that pursues the highest journalistic standards and adheres to a strict set of editorial policies. independent operation of the Digital Currency Group, which invests in criptovalute and blockchain startup.

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