On Wednesday, the price of Bitcoin fell massively. VanEck and SolidX had proposed that the Securities and Exchange Commission should approve a Bitcoin ETF. Though this is the third time VanEck has made such a proposal, their wish is yet to be granted. The decrease in market cap came as the SEC opted to delay their decision, with a 4% drop within 24 hours to a trade price of $6,500. Ultimately, this means a market cap decline of over $9 billion.
Earlier this year, Solid X, a company offering financial services, collaborated with VanEck, an investment firm, with the goal of an ETF launch. During this third attempt, VanEck had proposed that each share of their Bitcoin Trust would cost $200,000. According to Gallancy, the launch of this Trust is currently set for early 2019 assuming they get a positive decision. The fund will then be used to track a Bitcoin index from MVIS, which uses over-the-counter prices rather than crypto exchanges.
During the first appeal by VanEck, the company decided to withdraw the application three months in – but this was back before BTC futures existed. They made a similar request again in December, but withdrew once more after SEC staff requested them to do so.
The SEC commission had concerns about the price volatility and the ease of withdrawing cash from customers. This has led to a lack of definitive response with a knock-on decrease in price this week. The proposal by SolidX was turned down for similar reasons as the Winklevoss ETF proposal earlier in July.
If this third proposal is ultimately approved, VanEck will market the new ETF while solid X will sponsor and create an underlying index, with the Bank of New York Mellon will serve as the custodian. The CEOof VanEck views Bitcoin as a legitimate option for investment.
Several applications have been lodged for Bitcoin ETFs so far, but still not a single one has been approved – yet.