Opinion: Limited launch of Bitcoin ETF …

Opinion: Limited launch of Bitcoin ETF …

Opinion: VanEck / SolidX Limited Bitcoin ETF Launch Is Nothing More than a Marketing Gimmick

As it became known this Tuesday, investment management companies VanEck Securities Corp. and SolidX Management may provide institutional investors with access to their bitcoin ETFs this week without waiting for a full launch from the US Securities and Exchange Commission (SEC). However, securities and cryptocurrency lawyer Jake Chervinsky says the name “ETF” does not reflect the nature of the instrument that VanEck and SolidX may currently launch..

“This is misinformation,” he writes. – VanEck SolidX Bitcoin Trust is not an ETF. It looks exactly like the Grayscale Bitcoin Trust, which was launched almost 6 years ago. Calling it a “capped ETF” is a tricky marketing strategy, that’s all. Calling it a full ETF is wrong. “.

Chervinsky draws attention to the fact that the term “limited ETF” is fictitious and does not refer to any of the existing recognized and regulated financial instruments.

“Rule 144A is a rather complex way of issuing closed investment trust securities on the secondary market. It is not a “traded fund” in the full sense, “he adds..

Opinion: Limited launch of Bitcoin ETF ...

The lawyer also notes that ETFs are launched on exchanges, where they are available for investments by financial institutions, retail investors, investment advisors, etc. Closed-end investment trust securities are sold to accredited investors and can sometimes be traded on an exchange, but this usually does not happen.

“If you read Rule 114A, you will find that it has almost nothing to do with the standards and requirements that apply to ETFs. The fact that you can find a law that allows different investment vehicles to exist does not make these mechanisms alike, he says. – The benefits of ETFs (liquidity, pricing, transparency, investor protection, etc.) depend on the listing on a major exchange and the structure and requirements that accompany formal ETF approval. Private equity trusts are great in their own way, but they don’t have any of the benefits of ETFs. I don’t think this launch will have a tangible impact on the market. “.

Opinion: Limited launch of Bitcoin ETF ...

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