VanEck, SolidX Make Case for Bitcoin ETF at Latest Meeting With US SEC


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                The U.S. SEC has published a memorandum from the latest meeting regarding the Bitcoin ETF proposal from VanEck and SolidX.
                <p dir="ltr">The <a href="">U.S.</a> Securities and Exchange Commission (<a href="">SEC</a>) has <a href="" target="_blank" rel="nofollow,noopener">published</a> a memorandum Nov. 28 of the latest meeting regarding a Bitcoin (<a href="">BTC</a>) exchange-traded-fund (ETF) proposal. The application was originally brought to the commission by U.S. investment firm VanEck and <a href="">blockchain</a> software and financial services company SolidX.</p><p dir="ltr">According to the memorandum, representatives from VanEck and SolidX, as well as from the Chicago Board Options Exchange (<a href="">CBOE</a>) met with members of the SEC&rsquo;s Division of Corporation Finance, Division of Trading and Markets, Division of Economic and Risk Analysis and Office of General Counsel Nov. 26.</p><p dir="ltr">As previously reported, in June 2018, VanEck joined SolidX to <a href="">apply</a> for a physically-backed Bitcoin ETF to be listed on CBOE&rsquo;s BZX Equities Exchange: its approval or disapproval is still pending since the SEC postponed its decision this <a href="">August</a>. &nbsp;</p><p dir="ltr">At the center of the presentation&rsquo;s argument was a comparison of Bitcoin as a commodity with more traditional assets &mdash; crude oil, silver and gold &mdash; all of which already have ETFs at market.</p><p dir="ltr">In an analysis of price formation across traditional commodities alongside Bitcoin, the team argued that &ldquo;[s]imilar to gold and silver, Bitcoin derives its value as a &ldquo;money substitute&rdquo; (unlike crude oil, which is a &ldquo;pure industrial commodity&rdquo;).</p><p dir="ltr">The presentation emphasized that in all three traditional commodity futures markets, &ldquo;empirical evidence&rdquo; shows that &ldquo;spot and futures prices are cointegrated,&rdquo; indicating they &ldquo;are tightly linked.&rdquo; The same, as per the presentation, pertains to Bitcoin spot and futures, and this pattern &mdash; for all commodities at hand &mdash; is &ldquo;evidence of a well-functioning capital market.&rdquo;</p><p dir="ltr">In another central argument, the VanEck-SolidX team argued that Bitcoin was in fact more resistant to market manipulation than its traditional counterparts with approved ETFs.</p><p dir="ltr">In the case of physical commodities, the team said that &ldquo;inside information,&rdquo; such as &ldquo;the discovery of new sources of supply&rdquo; or &ldquo;significant disruptions&rdquo; at production sites, can be exploited. For Bitcoin, these situations are &ldquo;inapplicable,&rdquo; according to the claimants.</p><p dir="ltr">Among further examples of Bitcoin&rsquo;s &ldquo;resilience&rdquo; to manipulation, the presentation included the lack of a &ldquo;strong concentration of funds on any particular Bitcoin exchange or OTC platform,&rdquo; given that &ldquo;[a]rbitrageurs must have funds distributed across multiple trading platforms in order to take advantage of temporary price dislocations.&rdquo; &nbsp;</p><p dir="ltr">Moreover, the &ldquo;arbitrage process also has advantages in Bitcoin as compared to other commodities, such as oil, because the homogeneity of Bitcoin makes for a uniform worldwide market rather than regional semi-independent markets that result in non-fungibility and market fragmentation.&rdquo;</p><p dir="ltr">As <a href="">reported</a> earlier this week, VanEck has just announced a partnership with the world&rsquo;s second largest stock exchange <a href="">Nasdaq</a> to jointly launch a set of &ldquo;transparent, regulated and surveilled&rdquo; digital assets products, starting with a Bitcoin futures contract, slated for as early as Q1 2019.

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