Cointelegraph has previously covered the nature of ETFs in a separate article. In short, an ETF is a kind of investment fund that is tied to the price of an underlying asset — a commodity, an index, bonds, or a basket of assets — like an index fund and is traded on exchanges, available to both retail and institutional investors
Winklevoss twins’ self-titled fund, the Winklevoss Bitcoin Trust, was submitted to the SEC to be listed on Bats BZX Exchange (BZX) as COIN, an ETF “that can track the price of Bitcoin because its only asset will be Bitcoin,” as per its website. Shares of COIN would represent fractional ownership of the fund’s total Bitcoin holdings
Essentially, the agency wasn’t convinced in the Winklevoss’ plea that Bitcoin markets are “inherently resistant to manipulation
a strong signal that innovation is unwelcome in our markets, a signal that may have effects far beyond the fate of Bitcoin ETPs [Exchange Traded Products].” Thus, the main dilemma regarding Bitcoin ETFs revolves around the SEC’s role in the market. While the agency stressed that their rejection did not attempt to assess whether cryptocurrencies or blockchain technology “[have] utility or value as an innovation or an investment
as the price of BTC fell by as much as 3.6 percent to approximately $7,850 soon after the news emerged, although it was quick to bounce back to the green to trade around the familiar $8200
The closest ETF to the SEC’s overview is the Bitcoin ETF powered by investment firm VanEck and financial service company SolidX, which applied to the SEC in June, as per its press release. Both companies have tried registering separate ETF previously but found no luck. They hope to list the new ETF on Cboe BZX Equities Exchange. What chiefly distinguishes it from the Winklevoss’ approach is insurance: The VanEck SolidX fund is physically backed — meaning that they will actually hold BTC — and the firms reassure that this will protect against the loss or theft of the cryptocurrency. According to their filing with the SEC, each share of the VanEck SolidX Bitcoin Trust is set to cost a hefty $200,000. As SolidX CEO Daniel H. Gallancy explained to CNBC, the price is set at a higher rate to focus on institutional investors. The SEC has reportedly received over 100 comments from various economists, CEOs, financial analysts, etc. at its request and could be reviewed as soon as September. Moreover, there are multiple other ETF applications that are due for review by the SEC, such as one from Direxion