The U.S. Securities and Exchange Commission, better known as the SEC, moves the decision about Bitcoin ETFs again and again, is now almost a ‘Running Gag’ in the crypto world. However, it is so that there is legal game, and exemptions that allow companies to bring Bitcoin investment products without prior approval by the SEC on the market.You should wait on the decision of the SEC in respect of a Bitcoin ETF, while drinking tea and twiddling my thumbs is turning? This question probably VanEck and SolidX, and an answer is found – a kind of ‘intermediate product’, which is also referred to as a Bitcoin ETF light.With today’s article, we would like to bring some light into the Dark and the Bitcoin ETF will light a fact check undergo. What is behind the product? Who may invest? The Basis on which the product is offered and many other questions. So much can be revealed already: the title of Bitcoin ETF light, the product has not earned actually.
Contents
Despite the efforts of many companies the SEC has approved a Bitcoin Exchange Traded Fund (ETF) still. The Commission has taken the time (and still) to rate all the proposed (rule)Changes for such a product precisely. And the sum of these Changes has led to the whole process again and again, in the length.A high-profile Bitcoin ETF, which has been waiting more than a year on the approval by the SEC, the VanEck SolidX Bitcoin Trust issued SolidX Bitcoin Shares to be traded at the Cboe BZX Exchange. So much for history.
Securities Act is still the basis
Now I have already mentioned in the introduction, that there are exceptions and legal leeway, which will allow an intermediate product. Let’s get to it now: in accordance with Rule 144A under the Securities Act of 1933, (!) have decided VanEck and SolidX about your product in a modified, this paragraph is relevant, Version. Financial products and equities, the fall in these paragraphs, are, in fact, exempt from the Authorisation requirement by the SEC. Daniel H. Gallancy, CEO of SolidX, commented on this:
As the first Bitcoin product in the United States with Standard ETF creation and redemption, as well as well-established Clearing and Settlement procedures for institutional investors will be able to finally build a commitment in Bitcoin in a familiar context.
For more information about the actual product can be from the following Screenshot (and at the end of the article from the source) removed. The ’sponsorship fee‘, for example, 2% and insurance fee of 0.9% is. The Bitcoin of the Trust is to be stored in a cold storage and are insured against theft or loss.You don’t want to buy Bitcoin, you know, but where? To decide the right provider is not always easy. Therefore, we recommend that you take the time to look at our Bitcoin Broker & exchanges comparison. Often several providers are already required to really get all the Cryptos to cover. See for yourself: Bitcoin Broker & stock exchange compared with that now read.
VanEck SolidX Bitcoin Trust, a Bitcoin ETF?
In the media, the VanEck SolidX Bitcoin Trust is referred to well and also as a Bitcoin ETF light. Also, the editors themselves describe their product as something that looks like an ETF and an ETF to the touch. In English that sounds like this:
VanEck SolidX Bitcoin Trust 144A Shares (the “Trust”) looks and feels like a traditional ETF.
But actually, the 144A product from VanEck, and SolidX can not be referred to as the Bitcoin ETF. Because, as the Name of the Exchange Traded Fund suggests, is an ETF an exchange-traded index funds. The VanEck SolidX Bitcoin Trust, however, is not traded on an exchange, but rather OTC (engl. for over-the-counter).However, this happens also in an SEC-regulated environment, namely the OTC Link ATS. VanEck itself, emphasized that OTC Link ATS had, in contrast to a stock market only a ‘limited liquidity’. Last but not the least, the Bitcoin Trust is not publicly accessible, so that only qualified institutional investors (engl. qualified institutional buyers, short QIB) have access to the Bitcoin Trust. In the Original document it is stated:
The Trust seeks to provide qualified institutional buyers (QIBs) access to a convenient and cost-effective way to buy and hold Bitcoin.
Why is the ‘Bitcoin ETF’ a Bitcoin Trust in accordance with rule 144A, and who can invest?
We come back again to the starting position. VanEck and SolidX want to actually emit a Bitcoin ETF can’t do this currently, because the SEC has not yet made a final decision and the trading of securities requires a licence.In other words, A company may not offer securities or to sell, unless the offer has been registered with the SEC and approved, or an exemption from the approval is. The exemption from the Permit requirements, the VanEck and SolidX decided now ” have to, thanks to the article 144a of the Securities Act of 1933. This provides an exemption from the licensing or permit requirement. However, this applies only with the limitation that further sales of securities are allowed only to qualified institutional buyers (QIBs).We jump now short from 1933 to the year 2012. The so-called Jumpstart Our Business Startups (Jobs) Act, on 5. April 2012 by former President Barack Obama has been put into effect, directed the SEC to amend the Securities Act and to expand to several exceptions. What are the positive Changes this brings with itself, described VanEck as follows:
The Jobs Act in 2012 changed rule 144A in order to permit brokers and dealers, Rule 144A securities by means of General advertising to offer. A General Marketing can also increase the liquidity of the investors in the Rule 144A securities, when such products are re-selling platforms are developed.
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Bitcoin ETF: Who is behind the concept of a QIB?
VanEck and SolidX confirmed now, therefore, in this context, that only QIBs may act VanEck SolidX Bitcoin Trust 144A Shares. Often the speech is on the topic of Bitcoin ETF of the institutional investors. Therefore, we would like to throw again a short, but precise view on the Definition of qualified institutional buyers, short QIBs,.QIBs are generally as an institution with a Portfolio of securities with a value of over 100 million US Dollars defined as a registered Broker with at least $ 10 million in securities owned or in the administration, and a Bank with at least US $ 100 million in securities of third parties, and an audited net worth of at least $ 25 million.Accordingly, examples of QIBs are are companies, ETFs, hedge funds, insurance companies, investment funds and registered investment Advisor.QIBs are not exceed to be confused, therefore, with “accredited investors”, which include any natural Person might, whose net assets 1 Million US dollars. A natural Person however can never be a QIB.The VanEck SolidX Bitcoin Trust as an interim solution before the Bitcoin ETF. What do you think about such products and how you rate their influence on the crypto market? Come in to our Telegram Chat and talk with the experts and the Community. Subscribe to our News channel to not miss any News.
Bitcoin ETF as a price driver for BTC?
With the ‘right’ Bitcoin ETF, the ‘big money’ institutional investors will flow into the market. The expectations of the Bitcoin exchange rate are correspondingly high. But not only the approval of the Bitcoin ETF, but additional factors, such as the upcoming Halving should push the Bitcoin price in the future, in the new height. If you now in a timely manner in the BTC position, you can do this on the multi-award-winning and award-winning platform from eToro. In particular, for beginners, the platform provides one of the best User experiences in the world. In addition, you can not only rising but also falling share prices!Just try it out and get in, instead of just reading!75 % of private CFD accounts lose money. No EU investor protection. (Image Source: Shutterstock)