In an official report entitled “Blockchain and Digital Assets: US Equity Research” Canaccord researchers Michael Graham and Scott Suh wrote:
“And although the VanEck SolidX Bitcoin Trust, seen by many as the most formidable candidate for a potential approval, is due for a potential decision as early as this month, it is largely believed that the SEC will extend its deadline, in which case a decision may not be made until March 2019. Meanwhile, we note that other bitcoin-based securities (e.g., Bitcoin Tracker One) have been available for trading on regulated exchanges as early as May 2015 in Sweden, while north of the border, Canada is working towards its own bitcoin ETF product, the Evolve Bitcoin ETF.”
Historically, the U.S. Securities and Exchange Commission (SEC) has been reluctant towards approving ETFs based on emerging assets and commodities. In the case of Bitcoin, as seen in the rejection of the SolidX Bitcoin ETF and the Winklevoss Bitcoin ETF in 2017 and 2018, the SEC does not prefer to publicly disclose their decision until the final deadline, regardless of the outcome of their internal discussion.
Hence, although the VanEck-SolidX Bitcoin ETF and the Chicago Board Options Exchange (CBOE) Bitcoin ETF are said to have a high probability of being approved by the U.S. SEC, the commission will not publicly disclose its decision until the final deadline, February of 2019.
The delay of the decision of the U.S. SEC to approve or reject VanEck-SolidX and CBOE Bitcoin ETFs could have a negative impact on the short-term price trend of BTC and the rest of the crypto market, which largely depends on the movement of its most dominant cryptocurrency.
One positive takeaway from the Bitcoin ETF saga is that the market has never demonstrated the level of confidence investors have shown towards VanEck-SolidX and CBOE Bitcoin ETFs.
Canaccord researchers emphasized that due to the history of VanEck and CBOE in dealing with regulated U.S. markets and the U.S. SEC, their Bitcoin ETFs will likely be approved by the SEC. The two ETFs have full insurance, guaranteed secure storage for investors, and most importantly, do not depend on a single crypto exchange for valuation, which ultimately led the Winklevoss Bitcoin ETF to be rejected.
Since early 2018, the biggest companies in the cryptocurrency sector including Coinbase and Ledger have focused on developing a suite of institutional products, to assist large-scale institutional investors in commiting to the cryptocurrency market.
Canaccord researchers stated that the trusted cryptocurrency custodianship provided by Coinbase, custody solutions developed by Ledger and BitGo, and the ETF filing of VanEck have attracted institutional investors into the space and will continue to increase the demand for crypto in U.S. markets.
“The arrival of a potential bitcoin ETF remains top of mind for institutional investors seeking exposure to this emerging asset class, and there are now multiple applications pending approval by the SEC, most notably that proposed by Van Eck/SolidX. In addition, institutional custody continues to make progress, as Ledger announced a partnership with Nomura and Global Advisors during the Consensus conference in May and Coinbase launched its institutional custody product in early July,” Canaccord researchers added.
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