Van Eck, SolidX Sell Fund Shares to Large Investors, Is It an ETF?
After years waiting for a verdict on launching a Bitcoin exchange-traded fund (ETF), Van Eck launched a product for large-scale investors, though still not the widely available fund that was expected.
VanEck and SolidX presented a limited version of its intended Bitcoin-based exchange-traded fund (ETF), following a procedure for investment vehicles offered to high net worth buyers and institutions.
Based on Rule 144A, privately placed securities can be sold and traded among qualified institutional buyers, thus offering an opportunity to the Van Eck SolidX Trust to issue shares and offer them based on a different compliance regime. The investment will be available to a special class of investors:
“Qualified institutional buyers (QIBs), defined generally as an institution with a portfolio of securities valued at more than $100 million either owned or under its management, a registered broker-dealer with at least $10 million in securities owned or managed, and a bank or savings and loan that both (i) owns, or invests on a discretionary basis in, at least $100 million in third party securities and (ii) has an audited net worth of at least $25 million.”
The proposed share placement thus recalls more the offering of Grayscale Capital, which offers shares to a trust holding various digital assets. However, this model is not a classic ETF, which may be traded on larger markets and open to the public.
Still, Van Eck has managed to offer a vehicle for institutional investors to gain exposure to BTC. Along with the already realized futures markets on the CME, and the upcoming Bakkt futures market, in 2019, BTC finally saw the tools for mainstream and large-scale investor adoption. However, interest in the leading coin may be initially lower than expected, and not sway the open international markets where the BTC market price is established.
In 2019, BTC still has a net gain of above 300%. After a recent slide to $9,500, BTC recovered, and trades at $10,564.63, with still indecisive about returning above $11,000. BTC became the leading coin in 2019, dominating 70.5% of the entire market capitalization. Despite expectations of altcoins taking over, BTC still looks like the most promising digital asset.