On June 26th, The US Securities and Exchange Commission (SEC) received another application from the Chicago Board Options Exchange (CBOE) to list a Bitcoin ETF. This application comes after SEC declined to approve CBOE’s March request to register a Bitcoin Exchange Trade Fund (ETF) from Winkelvoss Twins. Even though SEC dropped CBOE’s earlier request, this latest application might be a silver bullet for getting listed. Judging from the documents presented by the CBOE global markets, the market might register a Bitcoin ETF by Q1 of 2019. 

The Bitcoin ETF Application Details

This listing application was first submitted to SEC by CBOE BZX Exchange Inc. on 20th June 2018. Primarily, the board has proposed to list and trade the shares of SolidX Bitcoin Shares (as the fund). In their recommended listing details, VanEck SolidX Bitcoin Trust (as Trust) will allot SolidX Bitcoin under BZX Rule. If the proposal is approved, it will be the first time CBOE BZX Rule will oversee the listing and trading of the trust shares. 

Going by SEC’s notice on Registration Statement, a share will represent a beneficial interest in the Trust’s assets that will be worth 25 Bitcoin (about USD 167, 637per share). This condition is likely to keep away retail investors from trading in the Bitcoin ETF. The volatility and high-risk nature of the Bitcoin have been the main argument supplied by SEC for not listing Bitcoin ETF among retail investors.   This new requirement adds to the objective of ensuring that safety parameter.

Other details of the application were those drawn from the listing of VanEck SolidX Bitcoin Trust as was approved on 15th September 2016. The features list the Trust for The US federal tax. It also gives a lifeline of the Trust as being without any fixed expiry. If registered, the Trust will be liable to perform the following activities:

Trust activities will be limited to:

  1. Issuing Baskets in exchange for cash, Bitcoin or both with interested Cash Custodian(s) or Trust.
  2. Purchasing Bitcoin from exchanges and OTC transactions.
  3. Selling Bitcoin when necessary to cover the expenses drawn from the Trust’s expenses, sponsors or other liabilities.
  4. Selling Bitcoin for redemptions when necessary.
  5. Providing cash and/or Bitcoin as an exchange for the basket(s) surrendered for redemption.
  6. Maintaining insurance coverage for Bitcoin held by the Trust. 
  7. Securing Bitcoin held by the Trust.

The primary goal of the Trust will be to exhibit the performance of the price of the Bitcoin. In so doing, it will also have to aim at lowering its operational cost through investing in assets in the OTC markets rather than domestic or international Crypto exchange.

Why SEC is likely to approve CBOE’s request to List a Bitcoin ETF

They say, “Where there is smoke, there is fire.” In the case of CBOE’s application to list a cryptocurrency ETF, there seems to be a whole cloud of smoke. Firstly, as I had hinted before, The Securities and Exchange Commission has been receiving such like requests in the past (This being VanEck’s third attempt). With the increasing pressure for listing and the popularity of digital currencies, soon SEC might have to show a white flag.

Also, SEC had earlier on raised various concerns over the security of the cryptocurrency investment. This concern has been continuously raised as a way of protecting the retailer investors. The new proposal seeks to minimize the number of retailer investors by selling shares at 25 BTC. 

At the moment, the views entertained are open to speculation as the move to list SolidX Bitcoin ETF will rely upon SEC’s decision. Even so, please let us know your opinions on this application in the comments below.  

Amna El Tawil is an experienced journalist with a strong background in financial writing. She is a cryptocurrency enthusiast and has been writing about digital currencies since 2016. When not writing, Amna can probably be found in bed with a book cuddling with her beloved Siberian Husky.

1 COMMENT

  1. This is scary stuff. This will mean that the price of Bitcoin will probably stop dropping 70% from it new all time highs. In the past it always goes up high enough to come back down 70% to rest on the previous all time high. Which means next time it has to go up to 80k to come back and rest on 20k. This is happening the past decade . Now it won’t be coming down that far which means this time right now is probably the cheapest Bitcoin will ever be again . There is now no way you can wait until the next crash to buy Bitcoin because if this goes through it will go up so high that it will rest at nothing like 70% below it’s next high making it harder for newbies to buy whole bitcoins. Right now is the time to buy all the tokens you can even if Bitcoin does come down to $1500 in n the coming months, buying at $6000 is going to be a lot cheaper than missing out if it goes up from here and having to buy at higher pricing. Also most tokens are down 95% from their highs so they are dirt cheap right now and even if they come down further the risk of missing them isn’t worth waiting for them to come down lower as $12 tokens right now are only $1.40. $1.50 tokens now are 7 cents. Get in. These prices won’t hurt anyone who is investing for 1 to 2 years because they will go up way high . Investing for a few months is a different story and those people should just stick to the stock market until the volitile begginings of this revolution are over. Even if this does not revolutionize the global financial system, tokens will revolutionize the online financial system because there are far too many people and companies and Fiat dollars invested into blockchain for it to stop . Even the tech industry is complaining that they are losing their best minds to blockchain. The online financial world has changed and digital money and digital fundraising has taken over the digital world as it should. Cash is for in person, crypto is for online. Soon it will be known as digital money taking away the word crypto that scares people and makes people think it’s harder to understand than it is. The bay sayers just need to look at the people who are CEOs and teambers of all these new tokenized companies because they are the best minds out world has and only getting better. You saying Bitcoin has no value is ridiculous because it has the best brains int he country investing their time and lives In to it.

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