In brief

  • US firms are still trying to get a Bitcoin EF through regulators.
  • An ETF has several qualities attractive to investors.

In the closing days of 2020, investment firm VanEck filed an application with the US Securities and Exchange Commission (SEC) to form the VanEck Bitcoin Trust, an exchange-traded fund (ETF).

Equities market operator Cboe BZX Exchange has now filed a proposal with the SEC to list and trade shares in that trust. The filing, it says "builds on VanEck's earlier S-1 filing" and "represents the next steps in bringing what could be the first U.S. bitcoin ETF to market."

The proposed rule change would "list and trade shares of the VanEck Bitcoin Trust...under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares." According to the rule, shares would be redeemable for Bitcoin.


Cameron and Tyler Winklevoss, the founders of cryptocurrency exchange Gemini, first proposed a Bitcoin ETF in June 2016. The SEC rejected the proposal. Since, several firms, including VanEck and Cboe, have filed proposals with the regulatory agency, only to see them rejected or withdrawn.

An ETF is an investment fund that trades like a stock, meaning people can buy or sell it as long as the market is open. Mutual funds and other investment products act differently, with traders only able to get in at the close of the day.

A Bitcoin ETF tracks the price of Bitcoin, allowing investors who are interested in the cryptocurrency, but wary of holding it themselves, to get exposure to the asset. Users buy shares in Bitcoin, not actual Bitcoin.

Overall, a Bitcoin ETF would be a more accessible investment instrument than, say the Grayscale Bitcoin Trust, which is open only to accredited investors, requires a minimum investment of $25,000, and doesn't allow buyers to trade their shares for six months.

While US regulators have yet to approve an ETF, the regulatory landscape is changing. Last month, Canada became the first North American country to welcome a Bitcoin ETF, approving the Purpose and Evolve funds in rapid succession.


A Bloomberg analyst told Decrypt that, after doing $165 million in trading volume in its first day, Purpose's debut "was arguably the most successful ETF launch of all time." The US is a much larger market than Canada, providing some hint at why Cboe and VanEck keep pushing forward proposals.

In an email shared with Decrypt, a spokesperson for Cboe said, "Cboe believes that approval of a bitcoin ETF could provide investors access to bitcoin exposure through a transparent, regulated vehicle."

Perhaps, this time, things will be different.

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