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Shrewdness in VanEck’s Bitcoin ETF Withdrawal?

Shrewdness in VanEck's Bitcoin ETF Withdrawal?

Investment management firm VanEck‘s withdrawal of its Bitcoin exchange-traded fund (ETF) application from the Securities and Exchange Commission (SEC) last week, allowing it to trade on the CBOE, may have been a good move according to some analysts.

As the industry still awaits the launch of a regulated Bitcoin ETF, VanEck’s withdrawal raised some eyebrows. The firm suggested that the government shutdown was looking to become a lengthy imposition on SEC activities being completed, although President Trump has since called a temporary halt to his plans for the construction of a Mexican wall. CEO Jan Van Eck explained that he had already been already in discussions with the SEC at the time he decided to withdraw the application, commenting, “…instead of trying to slip through or something, we just had the application pulled and we will re-file and re-engage in the discussions when the SEC gets going again.”

However, Jake Chervinsky, a securities laws expert in the US government, suggests that there was another strategy involved in the timing of the withdrawal; one that in the long term could result in VanEcks application being successful. Chervinsky believes that fear of rejection and subsequent bad PR for the company, as a result, was the more likely reason for VanEck pulling the application when it did.

Angling that PR-wise, a delay is always better than a rejection, Chervinsky feels that the firm must have realized how it couldn’t convince the regulator before the deadline, a view also shared by eToro’s senior analyst Mati Greenspan who argued:

“This proposal had a very slim chance of success… SEC Chairman Jay Clayton has been stressing that the Bitcoin market is not yet mature enough for an ETF.”

Greenspan goes on to argues that the VanEck temporary withdrawal was actually good for the market and shows by the muted industry response at the time that the cryptocurrency market is no longer “dependent on any government or financial institution and no single product or service has the power to make or break Bitcoin”.

 

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