The company from New York VanEck which is engaged in management of investments and submitted one of the rejected applications for cryptocurrency exchange funds has commented on concern of the U.S. Securities and Exchange Commission (SEC) concerning a conclusion to the market of new exchange investment funds (ETF) in cryptocurrencies.
Addressing the director of department of management of investments of SEC Daley Blass in the letter, VanEck considers five points at which he has pointed attention in the previous message of SEC: assessment, liquidity, storage, arbitration and potential manipulation.
Speaking about assessment, analysts of the company say that they don’t see in her “a new problem” for ETF as it is already accepted to use futures for creation of an investment profile in an asset.
“Assessment of such contracts is the well proved practice in which more than 100 exchange products now traded at the exchanges of the USA based on their cost on future contracts. The prices of CBOE and CME are sufficient for adequate determination of cost of net assets of ETF (NAV)”, – consider in VanEck.
Commenting on concern of SEC concerning the expected liquidity of ETF, VanEck notes that the market of bitcoins is very liquid, with average trade spread less than five basis points.
“The market of futures is one bitcoin more effective than the physical market of bitcoins, at the same time the total amount of the auction on CBOE and CME is up to 200 million dollars”, – analysts of the company have emphasized. They also specify that VanEck doesn’t intend to suggest ETF to invest in contracts for futures with a physical covering if they become available.
According to representatives of VanEck, the company can interact with participants of the market to find the solution for meeting requirements of direct storage. However the situation won’t change until “such mechanisms don’t become possible also viable”.
Speaking about arbitration trade, VanEck emphasizes that the diversified decentralized nature of activities for exchange of bitcoins allows to carry out it because of a difference in the prices and inefficiency on different platforms.
According to VanEck, market of bitcoins no more changeable, than actions of gold industry entrepreneurs.
“We consider that neither volatility, nor the current volume in the market of futures for bitcoin will interfere with process of creation and repayment by authorized participants and that it will allow to keep the market price of the offered ETF according to NAV”, – analysts write.
According to them, the potential manipulation and other risks connected with ETF in the majority are softened by the nature as the adjustable product traded at the exchanges of the USA.
“Though it is impossible to exclude manipulations in the spot market, we consider that because of the diversified property and volume of trade the market has no serious structural vulnerabilities. Thus, strengthening of the compulsory and regulating actions of SEC can reduce the number of bad participants in almost steady market”, – have summed up in VanEck.