At the beginning of 2018, there were more than a dozen outstanding bitcoin (BTC-USD) ETF filings made with the SEC. Most were planning on using the bitcoin futures market that launched in December as a means of indirectly investing in the cryptocurrency. There are loads of ETFs in business that use futures, so it seemed likely that the SEC would give the thumbs up to an ETF that would use bitcoin futures.
But then the SEC spoke and said it wasn’t ready. Among the reasons it was worried: concerns over how bitcoin futures would be accurately priced as well as a potential lack of liquidity that could materially harm investors should the value of bitcoin drop significantly and result in a serious imbalance of buyers and sellers. There’s no real indication that the SEC has changed its stance on bitcoin ETFs, but VanEck thinks it has the solution that will change the SEC’s mind.
In August 2017, VanEck was the first issuer that filed to launch a bitcoin ETF using futures. SolidX, a fintech company engaged in the bitcoin ecosystem, made its own attempt at a physically-backed bitcoin ETF, but was similarly turned away by the SEC. The two firms are now partnering for the VanEck SolidX Bitcoin Trust ETF (XBTC), a physically-backed bitcoin ETF that is meant to address many of the concerns the SEC had with the original ETF filings.