After yesterday’s panic reaction to the CBOE, Van Eck SolidX Bitcoin ETF procedural delay we thought it important to reach out to our CBOE contacts, Van Eck back channels, and industry vets to get their reactions. They didn’t disappoint – and you will pick up a theme very quickly in the commentary from three separate and institutionally different sources regarding the topic.
All gave nearly unanimous opinions about two issues of crypto interest; the expected delay and continued high expectations connected to eventual approval.
Our most consistent CBOE source responded via text this way (unedited): “Expected and the markets are acting irrationally to the announcement. Every single submission like this has gotten a delay. Again, expected. Still expect approval. 99% expectation. Print it, but as always, don’t use my name. :)”
A source we were passed at Van Eck responded via email with this: “Our team expected this delay, almost to the hour, and has been an expectation in our planning process. We won’t say when we expect an approval, but there has been specific speculation that we actually agree with and have incorporated into our timeline. We are in no way surprised by this. Most importantly, we believe our submission is the strongest yet to be put in front of US regulators, and believe that strength will be rewarded.”
We shared the above feedback from a source in our network who happens to be a former SEC employee now in the private sector (within the last three months): “The four people I still talk to on the daily at the SEC are basically telling me this ‘it is going to get approved but we are going to make the markets understand that we dug really, really deep i.e. investor protection/transparency’. And that makes sense. The vast majority of the public still has no idea what ‘digital assets’ are or what it means. So when you do an approval like this, and the successive approvals that will follow in this asset class – think of the 3-5 year return number that will be associated with this market? And maybe that is the key to the Van Eck SolidX approval? It is set up as an accredited investor vehicle. That singular element is probably what gives so many of us a firm belief in its approval. And it is a stroke of genius by the Van Eck SolidX group.”
That is where we believe the strength of this approval really lies. The $200,000 price tag effectively puts a floor on the type of investors who can realistically purchase shares. The product instantly becomes the property of accredited investors and institutional organizations.
If you effectively take out the concerns connected to mass affluent investors getting ‘rekt’ and allow institutions and UHNW clients to make the choice to dive in and test the waters before other approvals flood the markets and are available for the masses – it makes for an appropriate ‘beta test’ of a structured product focused solely on digital assets.
The upshot? Expect an approval – its a matter of when not if.