Nick Chong · 1 day ago · 2 min read
On June 26, the SEC received an application from Cboe Futures Exchange to launch the world’s first Bitcoin ETF. Initially scheduled for a decision next week, the SEC has now postponed the application’s deadline until late September.
Bitcoin ETF Delayed, Crypto Market Responds
The U.S. Securities and Exchange Commission (SEC) has delayed CBOE’s application deadline for a Bitcoin exchange-traded fund (ETF) until Sept. 30, reports Bloomberg.
According to an SEC filing released Aug. 7, the Commission “shall either approve or disapprove, or institute proceedings to determine whether to disapprove” the listing of SolidX shares as commodity-based trust shares by the end of September 2018.
Since the application for a Bitcoin ETF was submitted, more than 1,300 comments were received by the SEC–both supporting and denouncing the Bitcoin-backed ETF.
In late-July, the SEC denied Winklevoss-owned Gemini exchange’s Bitcoin ETF application for the second time.
The SEC ruling voted 3-1 against, stating that BATS Global Market’s BZX stock exchange failed to meet the requirements under the Exchange Act–specifically “the requirement that its rules be designed to prevent fraudulent and manipulative acts and practices.”
CBOE’s Bitcoin ETF application is thought to have better chances for approval due to its high minimum share price and exclusive availability to accredited investors.
CBOE’s Bitcoin ETF Application Details
One of the first exchanges to launch Bitcoin futures, CBOE Global Markets, partnered with Van Eyck Investment and SolidX to list the world’s first Bitcoin ETF.
CBOE plans to offer accredited investors access to buy and sell SolidX shares, which are currently valued at approximately 25 bitcoin. If the application is approved, investors will be able to trade a Bitcoin ETF in the form of baskets of 5 SolidX shares (~100 bitcoin) on the CBOE exchange:
“The Trust will issue and redeem ‘Baskets,’ each equal to a block of 5 Shares, only to ‘Authorized Participants.’ The size of a Basket is subject to change.”
According to the SEC application, the Bitcoin ETF will be physically backed by secure holdings of bitcoin in the VanEck SolidX Bitcoin Trust. To maintain liquidity and sufficient reserves, the Trust will trade bitcoin on over-the-counter (OTC) exchanges, both domestically and internationally.