Bitcoin ETF Back in Play Thanks to VanEck

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  • VanEck has reapplied for a Bitcoin ETF almost two years after its last application
  • The application for a VanEck Bitcoin Trust has once again been made in conjunction with the Cboe
  • A decision might not be made until 2022

In a world that has been turned on its head this year it is nice to see that some things stay the same – the Bitcoin ETF is back! VanEck, who have a history with Bitcoin ETFs (mainly withdrawing them), have filed with the Securities and Exchange Commission (SEC) to allow the trading of a Bitcoin ETF in what would be a seminal moment for the community, although the chances of approval remain slim.

VanEck’s Rocky Bitcoin ETF History

VanEck’s first Bitcoin ETF submission was lodged in 2018 in conjunction with Cboe and SolidX but was pulled in January 2019, although the trio re-applied just weeks later. However, following a rash of rejections by the SEC later that year, this application too was pulled later in 2019. This marked the end of Bitcoin ETF fever, with the last remaining application from Bitwise being rejected by the SEC just weeks later.

VanEck, seemingly taking notice of the massive institutional interest in Bitcoin in the second half of 2020, has decided to have another crack and asked for permission to open their VanEck Bitcoin Trust, which would open Bitcoin up to all institutions through a more recognised investment vehicle. A VanEck Bitcoin ETF would trade on the Cboe BZX Exchange.

Existing Concerns Could Sink Application

Pre-empting the SEC’s concerns, the VanEck Bitcoin ETF application notes that cryptocurrencies “have experienced extreme volatility in recent periods and may continue to do so” and that the protocols are “in the early stages of development”. Also of concern to the SEC is what VanEck calls “flaws” that have “disabled some functionality for users, exposed users’ personal information and/or resulted in the theft of users’ digital assets.”

Despite getting their application in before 2021 is even underway, the likelihood of a decision arriving in 2021 isn’t great, given that the SEC often takes the maximum amount of time to make these decisions. This means that they could take up to 18 months to make a call on the new VanEck Bitcoin ETF application, although other filings are likely next year given Bitcoin’s sudden increase in popularity with institutions.