As the Bitcoin ETF conversation continues, with twists and turns along the way, one particular submission continues to stand out. For reasons we have laid out before (lack of leverage, institutional pricing, accredited investors, etc) our sources at the CBOE remain resolute in their belief that the VanEck Solid X Bitcoin ETF will be approved in early 2019.
In lengthy discussions, yesterday afternoon, and a bit more this morning, the term ‘resolute’ was used on two separate occasions. Nobody is backing away from the belief that a Bitcoin ETF receives SEC approval, and that the VanEck product is the one that will receive it.
Some highlights from our conversation last night:
“The VanEck ETF is perfectly approvable if you have been reading the tea leaves at the SEC connected to previous submissions. It checks every box, as I’ve said before, and I’d be shocked, if it didn’t win approval. Now that approval will probably come with a bunch of dissenting language amongst the respective approving members – but it will still get approved. Not backing down in any way, in fact, I’d double down on it at the moment.”
More highlights from the same short discussion:
“I think the obsession over previous disapprovals and then ‘evaluation’ decisions caused angst that is unfounded. The SEC is first and foremost interested in investor protection with these types of new asset class submissions. VanEck has that issue covered in spades with zero leverage and accredited investor protections built into the product. That will win the day, eventually. Expect the rhetoric to ramp up and ‘warring factions’ to become more visible leading up to any decision early next year, but I remain resolute in my belief that an approval is forthcoming.”
Couple these comments with previous intel inside the CBOE and their connections to a decade worth of ETF approvals and the picture is clear. Bet on the VanEck ETF. Whether you think the crypto markets need or want an ETF like this, you can find a way to feel good about how this ultimately plays out.
Remember previous comments by these same sources:
“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 have 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.”
Again, continued clarity around a product that seems to have been created to the exact specifications of SEC rejection feedback. As the calendar turns to March of 2019, the SEC excuses won’t have anywhere to hide.
And another reminder, the regulatory environment in the US is not in a ‘tightening mode’ currently or throughout the first two years of the Trump administration. They could be categorized as ‘accommodative’ in scope. That continues to bode well for a final VanEck SolidX approval.
A bit more color from our report last week:
“On October 9th new SEC Commissioner Elad Roisman met with representatives from Van Eck, SolidX, and the CBOE to discuss the proposed Bitcoin ETF.Roisman is the first commissioner to publicly meet with representatives of the three groups. The previous presentation was made to SEC staff, specifically the Office of Market Supervision and Division of Trading and Markets.”
“In September, Republican Elad Roisman was confirmed for a seat on the SEC Commission. Prior to his appointment, the commission had only 4 of the possible 5 seats filled.Roisman is rumored to be friendly to crypto and free markets, similar to Commissioner Hester Pierce. Given Pierce was the only “yes” vote, approval would still require defectors.Interestingly, a current “no” vote in Commissioner Kara Stein will disappear in December as her term expiration requires her to leave the Commission.”
“Democrat Allison Lee is rumored to be her replacement, but the gap between Stein’s departure and Lee’s appointment could be a potential opening for the ETF approval.”
Resolute does seem an appropriate take on where this is headed. If there has ever been a ‘tailor-made’ regulatory product, that has taken great pains to adhere to SEC feedback – this is it.