Last week, VanEck filed a new application with the SEC to be allowed to issue an ETF on spot Bitcoin in the US.
After Grayscale, VanEck is also trying to apply for approval of an ETF on spot Bitcoin
The SEC is not making the decision to approve Bitcoin spot ETFs
It did so before the SEC finally rejected Grayscale’s similar application, and this new application traces another one previously filed also by VanEck and rejected by the SEC in November 2021.
This time it provided the SEC with an extensive set of reasons why it should be approved.
VanEck is already managing crypto ETFs traded on markets, including US markets, but in the US these are not ETFs collateralized directly with cryptocurrency tokens.
In the US, these funds are collateralized with cryptocurrency price futures contracts, while in other parts of the world they are collateralized with tokens stored in cold wallets.
It is worth noting that in the meantime a new spot Bitcoin ETF is just about to be launched on the Amsterdam Stock Exchange (Euronext), as European regulators are not raising the same doubts that the SEC has been raising for years now.
The new fund will be issued by Jacobi Asset Management of London, and should be called the Jacobi Bitcoin ETF, with ticker BCOIN. It is a physically backed (spot) Bitcoin fund, and will be the first of its kind on Euronext. There are, however, already very similar products in Europe, such as ETNs from 21Shares or VanEck.
BTC will be physically held by Fidelity Digital Assets, while the market makers will be Flow Traders and DRW.
Euronext has not yet provided an exact date for the launch, but it is expected in July.
VanEck’s rebuttals to the SEC’s decision
VanEck also points out that although there are no ETPs (Exchange Traded Products) on Bitcoin spot in the US, there are in Canada, so much so that many US funds are already using them to gain exposure to BTC.
Therefore they state:
“Approving this proposal — and others like it — would provide U.S. ETFs and mutual funds with a U.S.-listed and regulated products to provide such access rather than relying on either flawed products or products listed and primarily regulated in other countries”.
Among other things, Messari Research founder and CEO Ryan Selkis on the SEC’s refusal to approve the ETF wrote that the SEC is in fact harming the very investors it is supposed to protect.
He also argues that during Chairman Gary Gensler‘s current term, GBTC will not be converted to an ETF, and there is even a small possibility that the SEC has blocked Grayscale’s proposal:
“Out of spite, and because they don’t want to reward what they view as historically bad behavior”.
To sum up, what is going on seems indeed to be a battle between the SEC and ETF issuers in the US, with the government agency approving those on futures because these are regulated by the CFTC. At this point, it is to be expected that the match is far from over with the rejection a few days ago.
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