Arxnovum Investments Inc. filed with the Ontario Securities Commission in Canada for the “Arxnovum Bitcoin ETF” on January 11, 2021. The New York-based, Winklevoss-owned Gemini Trust company will be the sub-custodian of the bitcoin held by the ETF. The sub-custodian is a trusted company qualified to custody the product’s assets held outside of Canada. The long-discussed bitcoin ETF, therefore, becomes the hot topic again.
Bitcoin ETFs are exchange-traded funds that track the value of Bitcoin and trade on traditional market exchanges rather than cryptocurrency exchanges. They allow investors to invest in bitcoin without having to go through the hassle of using a cryptocurrency exchange while providing leverage to its price
Since Winklevoss filed with SEC the first bitcoin ETF in 2013, the SEC has rejected every bitcoin ETF so far. During the 8 years, no matter who filed the filling — ETF giant ProShares or leading crypto assets management corporation Grayscale, no matter what kind of assets the ETF invests in — including U.S. Treasury securities or just 25% of the total on bitcoin futures contracts, SEC quashes dreams of bitcoin ETF by rejecting them directly and forcing the applicants to withdraw.
Bitpush here creates an infographic regarding the timeline of the bitcoin ETF in the U.S. for you to better understand how the story happened.
A great number of crypto assets and blockchain companies forwent the idea to issue the bitcoin ETF due to SEC’s tough attitude. They then pinned their hopes on the European market, and crypto ETN or ETP. However, last December, Jay Clayton — the former chairman of SEC, concluded his tenure, which seems like a turning point for the crypto community.
President-elect Joe Biden is expected to choose Gary Gensler, a former financial regulator, and Goldman Sachs Group Inc. executive, to head the SEC, according to Reuters. More recently, Gensler has testified before Congress about cryptocurrency and blockchain on multiple occasions, pushing back against comparisons between cryptocurrencies and Ponzi schemes and declaring that the still-unlaunched libra token met the requirements of being security under U.S. law.
At MIT’s Sloan School, Gensler taught a course on cryptocurrencies and blockchains, calling the technology “a catalyst for change in the world of finance and the broader economy.”
VanEck filed with SEC for its new bitcoin ETF just one week after Clayton’s departure.
“All indications from the SEC are that a bitcoin ETF still faces an uphill battle,” said Nate Geraci, president of the ETF Store, an investment advisory firm. “That VanEck has the confidence to file for a Bitcoin ETF might indicate some shifting viewpoints within the SEC. Clearly, a key to watch as this drama continues unfolding is whom President Biden taps as SEC chair.”
Such an ETF “could be taken as bullish for Bitcoin because it does broaden the universe of investors who could be aware of Bitcoin,” said Everett Millman, a finance expert with Gainesville Coins.
However, JPMorgan strategists also indicated that approval of a bitcoin exchange-traded fund in the US could pull investors out of popular trade and erode key support of the cryptocurrency’s lofty price since it would sap investor capital from the Grayscale Bitcoin Trust.
By Sara Zhang