Investment firm VanEck has renewed interests in a directly-tied Bitcoin ETF offering after a hiatus following the rejection of its first application last November. The firm revealed on July 1 that it filed a fresh Bitcoin ETF application with the US SEC as it seeks to become the first to debut such a product tied to the live Bitcoin price.
“The Commission’s prior orders have noted that the spot commodities and currency markets for which it has previously approved spot ETPs are generally unregulated and that the Commission relied on the underlying futures market as the regulated market of significant size that formed the basis for approving the series of Currency and Commodity-Based Trust Shares, including gold, silver, platinum, palladium, copper, and other commodities and currencies,” a section of the filing read.
The pursuit for a maiden Bitcoin spot ETF goes on
Bloomberg Intelligence’s Henry Jim wrote on Twitter that the SEC was yet to notice the filing officially at the time and the filing has a decision deadline for March next year.
Grayscale is determined to get a green light on its proposal judging by the commitment it has shown in this direction. It already has several Bitcoin-tied derivatives offerings that have mostly received smooth approval from regulators.
CEO Jan van Eck in March criticized SEC’s delay tactics in allowing such an exchange-traded fund product to enter the market. He theorized that the financial watchdog is caught in a tough spot waiting for lawmakers and other authorities to give an okay on an approval decision.
Grayscale blow
VanEck’s application came just three days after the commission dismissed Grayscale’s Bitcoin Trust conversion proposal citing market manipulation concerns. The dismissal set back Grayscale, which had prepared a deal with market makers Jane Street and Virtu to close the discount of GBTC had the conversion agreement gone through. The New York-based asset manager protested the decision and responded by suing the financial watchdog within hours.
The retaliation was expected, as the asset manager had been buffing its legal department with last month’s addition of an expert solicitor Donald Verrilli Jr. The digital asset management firm argues that the regulator’s willingness to approve futures-based products while rejecting a spot offering is a violation of the Administrative Procedures Act. Grayscale’s legal team added that the SEC is inconsistent in denying a spot product on the grounds of insufficient protection from market manipulation when the products are price-based on underlying markets.
SkyBridge Capital founder: The SEC now stands for Stop Economic Creativity
GrayScale now joins other issuers of spot Bitcoin ETFs that have been rejected in the past month, including Fidelity, SkyBridge, and Valkyrie. SkyBridge Capital Anthony founder Scaramucci an interview with CNBC’s Squawk Box on June 30, censured the SEC, saying approval would have presented a massive opportunity for the US crypto industry to accelerate.
The renowned financier noted that a go-ahead would have better positioned the country to catch up with Canada and other European jurisdictions.
“The fact that the SEC is moving in this direction where the Europeans and Canadians are allowing for a cash ETF it’s just a huge missed opportunity.”
The SkyBridge founder was also keen to point out the irony in the SEC turning down all applications without offering regulatory clarity on the matter despite additions to its legal team. SkyBridge was said to be working on a second Bitcoin ETF proposal, but no developments have since been reported. The asset management firm’s First Trust SkyBridge Bitcoin ETF Trust was rejected early this year.
Jacobi Asset Management to launch debutant spot Bitcoin ETF in Europe
The picture is different for Europe’s case. Leading Dutch stock exchange Euronext Amsterdam, a member of the larger Euronext marketplace, will be listing its debutant Bitcoin exchange-traded fund (ETF) this month. Based in London, digital asset management platform Jacobi Asset Management announced last week that it is preparing to launch an ETF, named the Jacobi Bitcoin ETF, though not providing an exact date for it.
It will trade under the ticker BCOIN, having gotten an okay from the Guernsey Financial Services Commission last October. It would be availed to professional and institutional investors in Europe at an annual management fee of 1.5%. Jacobi founder and CEO Jamie Khurshid says the ETF will be the first spot product on Bitcoin in Europe and would not be allowed to leverage, lend, or stake any of its native assets.
The former Goldman Sachs banker also expressed his belief that the product should help allow investment firms that only exclusively dabble in regulated products to engage with digital assets. This will, in effect, increase stability and enhance asset adoption. As confirmed by an official spokesperson, BCOIN will also be the first spot Bitcoin ETF launched on Euronext, noting that currently, the marketplace’s products are limited to exchange-traded notes or are legally defined as debt instruments.
21Shares’ CBTC is the lowest cost Bitcoin ETP in the market
Global crypto exchange-traded product issuer 21Shares is enabling investors to try to optimize their portfolios amidst the currently persistent bear market. The ETP issuer announced listing the 21Shares Bitcoin Core ETP (CBTC) on the SIX Swiss Exchange at the end of June. The product is one of many planned to be built into a Crypto Winter Suite created by the firm to enable crypto traders and investors to pull through the market downturn.
The CBTC will be physically backed and allow consumers limited exposure to Bitcoin at a total expense ratio of 21 basis points (0.21%), which means it’s the lowest cost basis Bitcoin ETP today. 21Shares says that this rate, chosen to reflect Bitcoin’s 21 million cap, sits 44 basis points below the next product in the market. To sustain this plan, part of the underlying Bitcoin will be lent out on a fully collateralized basis to enable footing the operating costs.
Lending will only happen once the product grows to a desirable scale. 21Shares’ ETP Product Director Arthur Krause says the most convenient time to buy into an asset is typically when the prices have fallen. The CBTC makes this easier for investors to do so, especially when dealing with these particularly highly volatile conditions.
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