VanEck pulls back SEC app for retail BTC ETF bid, but will Bitcoin suffer?


VanEck Securities surprised the crypto-verse two weeks back when it decided to focus its efforts only on institutional investors and to limit its Bitcoin Trust to accredited investors. At the time of that announcement, their management team assured everyone that they were still committed to a retail offering, but now the news is that they have withdrawn their Bitcoin ETF application from the SEC’s review process, roughly one month before a final decision was to be forthcoming.

Back on September 4th, Ed Lopez, the head of ETF product for VanEck, spoke to reporters from Coindesk about how the move toward rounding up sophisticated investors was merely the first step in a multi-step process:

We still strongly believe the marketplace and many investors would be better served to have a regulated product out there and this is just one small step towards that and right now it happens to be only available to institutions.

VanEck did not choose to inform the public of its new decision. The SEC noted on Monday that the application had been withdrawn, without any explanation, leaving industry pundits to speculate this week what, if any, ramifications could occur in the crypto markets, why VanEck would choose to back away without stating a reason, and whether we might eventually see a BTC ETF anytime soon, as in 2019?

Reporters have been canvassing the “likely suspects”, leading to the following comments in the financial press:

  • NewsBTC: Jake Chervinsky, an attorney who specializes in cryptocurrency, tweeted: “VanEck withdrew its bitcoin ETF proposal today, presumably expecting that the SEC would reject it next month. Bitwise’s proposal is still pending (for now) & due for a final decision on October 13. My best guess — there will be no bitcoin ETF in 2019.”
  • Coindesk: Alex Krüger, an economist who focuses primarily on cryptocurrencies, tweeted: “Odds of the SEC approving a bitcoin ETF in the foreseeable future have always been extremely low. The market fully priced this reality in a while back. This ETF proposal withdrawal is irrelevant as far as $BTC price goes.”
  • Coingape: Analyst Joe Saluzzi: “No possibility for a Bitcoin ETF until legitimate surveillance measures are put in place. Until then, it is futile wasting SEC’s time with such filings.”
  • AskTraders: Skew Markets, a crypto analytics firm: “Bitcoin still hovers around $10,200. Based on the lack of a market reaction, there will be no Bitcoin ETF in October 2019”.

The Bitcoin market has since recoiled and begun to recover again to its range-bound behavior, but analysts are not attributing these recent moves in the market to VanEck or the above speculations emanating from the analyst community. Jay Clayton, the Chairman of the SEC, has recently hinted in the press that there is still “work left to be done”. A decision on the Wilshire Phoenix application is due late in September, but a delay is expected. Bitwise Asset Management’s final decision date is October 13th. The market may have “fully priced” in a “no” vote, as Krüger maintains, but it may not have.

The VanEck consortium, which included the CBOE, VanEck, and Solid X, may have just decided to focus on one thing first, before pursuing its retail BTC ETF offering. It has actually been working on that effort since March of 2017, but the word on the Street is that it only received four Bitcoins, roughly $40,000, in its initial week with its limited Bitcoin Trust. They could be taking their time, gradually on-boarding clients, while testing their platform. More information will surely be available that speaks to success or favor.

In any event, VanEck did see the need to release something for the public’s consumption. Per LiveBitcoinNews, Gabor Gurbacs, VanEck’s director of digital asset strategies, tweeted:

We are committed to supporting bitcoin and bitcoin-focused financial innovation. Bringing to market a physical, liquid and insured ETF remains a top priority. We continue to work closely with regulators and market participants to get one step closer every day.

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