Cryptocurrency mining platforms stand on shelves at Bitfarms’ facilities in Saint-Hyacinthe, Quebec, Canada, on Thursday, July 26, 2018. Bitcoin rebounded more than 30 percent in July, ignoring regulatory and security concerns that plagued the virtual currency for much of this year.
Photographer: James MacDonald / Bloomberg
Photographer: James MacDonald / Bloomberg
For years, regulators have voided hopes for a publicly traded Bitcoin fund, citing concerns about everything from market volatility and industry manipulation to reduced liquidity.
As Bitcoin itself, issuers continue to struggle.
VanEck Associates Corp. has started a new effort to launch an ETF that tracks the world’s largest digital currency, according to a report presented Wednesday to the U.S. Securities and Exchange Commission. The VanEck Bitcoin Trust would reflect the performance of the MVIS CryptoCompare Bitcoin benchmark fee.
It’s a bold move for the New York-based company. Over the years, there have been several requests for cryptographic tracking ETFs, and the SEC has denied all of them.
VanEck may be betting that a change in SEC leadership – with Jay Clayton stepping down as chairman of the board – combined with the growing adoption of Bitcoin on Wall Street has increased the chances of regulatory approval, according to analysts.
“All SEC indications are that a bitcoin The ETF still faces an uphill battle, ”said Nate Geraci, president of ETF Store, an investment advisory firm. “The fact that VanEck has the confidence to request a Bitcoin ETF may indicate some changes in views within the SEC. Clearly, a key to watching as this drama continues to unfold is who President Biden chooses as president of the SEC. “
The VanEck process comes in a week, when Bitcoin continues to break records. The biggest digital asset in the world has advanced about 300% this year, drawing the attention of some of Wall Street’s most famous investors, including Paul Tudor Jones, as well as firms like PayPal Holdings Inc.
While crypto fans see their rally continuing, many are also aware that its increased visibility may attract further scrutiny. The new SEC president may take a softer line than Clayton, but President-elect Joe Biden has appointed Janet Yellen as secretary of the Treasury. In the past, she described Bitcoin as a “highly speculative asset” and “not a stable store of value”.
“Upon entering the order now, it will reset the clock for a review when there will be new members and SEC leadership,” said Todd Rosenbluth, ETF research director for CFRA Research. “However, I think the SEC has made it clear that there are concerns that need to be overcome.”
Read More: Bitcoin faces regulatory scrutiny after record-breaking rally
According to the document, VanEck’s ETF plans to hold Bitcoin and will evaluate its shares based on the prices contributed by the exchanges that MV Index Solutions GmbH believes represents the top five exchanges for the cryptocurrency.
Bitcoin was trading 0.3% down, around $ 28,800, as of 7:49 am in New York.
This ETF “can be considered optimistic for Bitcoin because it expands the universe of investors who may know Bitcoin,” said Everett Millman, a finance expert at Gainesville Coins.
(Updates to expand the current quote, add prices.)