The VanEck SolidX Bitcoin exchange-traded fund (ETF) has already been stalled once in August 2018, and now the Securities and Exchange Commission (SEC) of the United States has delayed its decision again.

This was not surprising since some experts thought the SEC would likely delay until March 2019 which is the maximum time allowable under law, before probably rejecting it. What is somewhat surprising is that the SEC seemingly igored some 1,400 comments submitted to the SEC for the VanEck SolidX Bitcoin ETF, with virtually all of them in favor of it.

The director of VanEck, Gabor Gurbacs, says, “I am humbled and impressed by the public support of the VanEck-SolidX initiative to bring to market a well-constructed, liquid, physical, insured Bitcoin ETF. 1400+ comments, 99%+ in favor. The public has spoken! Bitcoin is compatible with the US and global capital markets.”

The reasons the Bitcoin and crypto community are extremely favorable towards the VanEck SolidX Bitcoin ETF is it would be backed by actual Bitcoins, meaning when someone buys a share of the ETF, the company in charge would buy actual Bitcoins for its reserve. This would cause the ETF to directly impact spot market demand and increase Bitcoin price, especially since it would be available to institutional investors on major stock trading platforms.

There have been many ETFs proposed to the SEC that are backed by cash instead of Bitcoin, which would make those a form of paper Bitcoins like the futures contracts currently available in Chicago. That would divert money from the spot market.

The SEC did acknowledge the favorable comments, however, issuing them a 21-day deadline to complete a lengthy 18-question writing assignment. The SEC questions center around how Bitcoin markets can be manipulated, are prone to insider trading, the risk generated by the Bitcoin futures markets, Bitcoin’s lack of a single price due to numerous global exchanges, the lack of surveillance, i.e. the lack of exchanges disclosing client data to the government, the relatively small size of the Gemini exchange which is closely linked with the ETF, only 100 shares of this ETF being available when it launches even though each share is 25 Bitcoins, and whether insurance backing the ETF’s reserves are sufficient.

Each question on the list has numerous statements that could be considered separate questions, so the SEC is essentially asking commenters to submit responses to about 100 questions within 21 days. The wording of the SEC statement suggests that comments which don’t answer all questions would be considered insufficient and probably irrelevant.

 

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