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VanEck, SolidX officially announce ETF-like bitcoin product for qualified institutional buyers

Wed, 04 Sep 2019, 04:48 am UTC

VanEck and SolidX have officially announced that the VanEck SolidX Bitcoin Trust will issue shares to Qualified Institutional Buyers (QIBs) in accordance with the SEC’s Rule 144A.

The official announcement follows a recent report from the Wall Street Journal that the companies were going to offer a “limited version” of a bitcoin exchange-traded fund (ETF) on Thursday.

Rule 144A allows public resale of restricted and control securities if a number of conditions are met. It allows privately placed securities to be traded only among QIBs with shorter holding periods.

The trust “looks and feels like a traditional ETF,” the companies said. The shares will allow QIBs to access many of the same features and mechanisms envisaged in such a public offering, such as insurance against the theft or loss of the trust’s bitcoin private keys and the open-end creation and redemption of shares.

The companies said that the trust seeks to provide QIBs access to a convenient and cost-effective way to buy and hold bitcoin through a cleared security that is tradeable through traditional and prime brokerage accounts.

“Institutional demand for bitcoin exposure is uncertain, because institutional quality vehicles simply have not, to this point, been readily available,” said Jan van Eck, Chief Executive Officer of VanEck. “We’re introducing a solution for institutions that fits within their operational processes and the current regulatory framework.”

According to a press release, SolidX is the sponsor of the trust, VanEck will provide marketing services, while BNY Mellon will act as the daily fund accountant, administrator and transfer agent. The trust will price its net asset value (NAV) based on the MVIS Bitcoin US OTC Spot Index, which tracks price feeds from major OTC bitcoin liquidity providers.

“The Shares can be quoted on OTC Link ATS, an SEC regulated alternative trading system using a fully attributable, network-based model for publishing quotes and negotiating trades, on September 5, 2019,” it said.

VanEck and SolidX said that they will continue their efforts to be able to offer a registered product, adding that if the SEC approves the ETF, the 144A issued Shares could benefit from public market resales.

“As the first bitcoin product in the U.S. with standard ETF creation and redemption and established clearing and settlement processes, institutional investors can finally gain exposure to bitcoin within a familiar context,” said Daniel H. Gallancy, Chief Executive Officer of SolidX. “We view the product as an exciting next step for SolidX and VanEck in our partnership as we work to bring institutional-quality crypto asset products to the marketplace.”

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