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VanEck’s Bitcoin Trust Flops With Only 4 BTC Under Management

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VanEck’s recently launched BItcoin Trust is a total flop, based on initial investment interest. | Source: Shutterstock

Following the divisive launch of a so-called “Limited ETF” from the fund manager VanEck, the crypto-focused offering has fallen short of impressive, citing just a single issuance of the instrument with a total of 4 BTC under management…

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Statistics from VanEck as of 09/09/19, on “ETF” i.e VanEck SolidX Bitcoin Trust 144A Shares. | Source: VanEck

The data was relayed via crypto analyst and commentator, Alex Krüger, who pointed out that the net assets held under the Bitcoin Trust 144A Shares, amounted to little more than $41,000.

Three days after launch, the VanEck bitcoin trust for institutional investors has reportedly managed to issue a whopping 1 (one) basket. It has 4 bitcoins or $41,400 in assets under management. Massive. pic.twitter.com/TUePbLVqBi

— Alex Krüger (@krugermacro) September 10, 2019

This lack of demand is pretty shocking, especially considering the initial enthusiasm surrounding the launch. Following VanEck’s announcement of the new instrument – which was described by the wall street journal as, “a van version of a crypto ETF” – bitcoin flew into a frenzy posting an impressive $450 rally. Coincidence or not, many ascribed the short run to the highly-anticipated launch of a crypto ETF.

Others were slightly fairer to VanEck’s nascent product. Analyst Tom Lee noted that it was “too early to judge” its success – a viewpoint shared by quite a few on Twitter.   However, one Twitterati associated the lackluster performance to a reduction of growth within the crypto industry itself. Krüger quickly retorted by noting that this was just one instance of a “bad launch of a product for which there’s not much demand.”

Is It Truly an ETF?

Under VanEck’s description of the instrument, the Bitcoin Trust “looks and feels like a traditional ETF.” However, the community remains divided over what this investment actually is. Notably, crypto Twitter’s lawyer-in-resident, Jake Chervisnsky, blasted VanEck’s attempts to play this off as a bitcoin “ETF,” suggesting that the offering was more comparable to shares in a trust.

This is misleading. The VanEck SolidX Bitcoin Trust is *not* an ETF. It looks exactly like the Grayscale Bitcoin Trust, which was launched almost six years ago. Calling this a “limited ETF” is a cute marketing strategy, but that’s about it. Calling it a full ETF is just wrong. https://t.co/e5kyeAE4gC

— Jake Chervinsky (@jchervinsky) September 3, 2019

Indeed, some may argue that VanEck’s new asset bundle brings nothing new to the table. Case in point: Grayscale’s own Bitcoin Trust, which launched six years ago, beat VanEck to the punch by some degree.

A ‘Real’ Bitcoin Fund May Soon Be a Reality

Regardless of misleading semantics, the prospect of a bitcoin ETF could be closer than anyone thinks.

Speaking to CNBC, SEC chair Jay Clayton offered his optimistic yet pragmatic opinion on the approval of a bitcoin-based ETF. Clayton noted that although the probability of approval is increasing there is still “work to be done.”

Are we any closer to seeing a Bitcoin ETF some day? SEC Chairman Jay Clayton to @CNBC: “yes, but there’s work left to be done” @SEC_News @bobpisani @kellycnbc @CNBCTheExchange #bitcoin #crypto pic.twitter.com/iJP3nn9XHc

— The Exchange (@CNBCTheExchange) September 9, 2019

The SEC’s general concerns around offering a bitcoin ETF still linger; regulatory worries concerning non-compliant exchanges, and price manipulation remain the leading issues. While Clayton recognized that progress has been made to quell these problems, he suggested that further steps need to be taken in order to satisfy regulatory due diligence.

Nevertheless, with little more than a month until the SEC’s final decision on two bitcoin ETF’s, including one from VanEck, it seems as if time may be running a little thin.

Last modified (UTC): September 11, 2019 6:08 PM