VanEck’s Bitcoin ETF Alternative Isn’t Doing So Well

VanEck, the institutional stock trading, and investment firm, seems to be having adoption issues with its new institutional investor-focused trust. 

Alex Kruger, a popular commentator, and analyst in the crypto industry, recently cited data from the company which showed that VanEck SolidX Bitcoin Trust 144A Shares, which was launched at the beginning of the month, has only $41,000 in total net assets. 

The company made some rather grandiose claims when launching the product last week, even going as far as comparing it to traditional exchange-traded funds (ETFs). However, it would seem that it hasn’t done much in terms of getting traction from institutional investors. 

As Kruger summarized on Twitter, the bad launch shows that demand from investors for it isn’t so significant. Whether or o the shares will continue to be listed remains to be seen, although the company doesn’t seem to be especially bothered by this. 

As a matter of fact, there is a case to be made that the product was only launched because VanEck is yet to secure approval from the United States Securities and Exchange Commission (SEC) over the listing of its Bitcoin ETFs. 

As regards the ETFs, the SEC has continued to stall on delivering a proper verdict. The most recent development concerning the ETF was a stall order, which the financial watchdog released early last month. 

Essentially, ETFs are a form of security that tracks a basket of assets which have been proportionately represented in the shares of the fund. Many believe that they could help spur a massive wave of cryptocurrency adoption, as investors could begin to buy cryptocurrency as an established investment vehicle. 

So far, however, no ETF proposal has been accepted by the SEC, even in light of wave after wave of proposal submissions. 

Currently, the SEC’s judgment will concern three ETF products; one by VanEck and SolidX, another by Bitwise Asset Management, and the third by Wilshire Phoenix. In its postponement order, the regulator announced that the VanEck listing had been delayed until October 18, while the Bitwise listing on the New York Stock Exchange will get a verdict on October 13. As for Wilshire Phoenix, its United States Bitcoin and Treasury Investment Trust will get a verdict passed on September 29. 

In the announcement, the SEC said, “The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change.”

The agency is permitted under securities laws to postpone its decision on proposals for financial products in order to get more information or to deliberate further on a rule change to accommodate the product’s listing.

The delay is the latest in a series of setbacks. VanEck and Bitwise have been at this since the turn of the year, but the SEC repeatedly delayed in March and May. Hopefully, the third time proves to be the charm in this case.