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VanEck SolidX Bitcoin Trust 144A Shares is the first open-end and DTC-eligible bitcoin security that can be held in a brokerage account.1
Quoted OnOTC Expert Market
SponsorSolidX Management LLC
Marketing AgentVan Eck Securities Corp.
Total Net Assets$584.5k
*See the Offering Memorandum for a detailed description of fees and expenses.
What is the VanEck SolidX Bitcoin Trust 144A Shares?
The first open-end and DTC-eligible bitcoin1 security that can be held in a brokerage account. Key attributes of the offering include:
The 144A Shares are being issued pursuant to Rule 144A promulgated under the Securities Act of 1933, as amended. The shares represent units of fractional undivided beneficial interest in and ownership of the Trust. Only Qualified Institutional Buyers (QIBs) may trade the shares.
What is a Qualified Institutional Buyer?
Qualified institutional buyers (QIBs), defined generally as an institution with a portfolio of securities valued at more than $100 million either owned or under its management, a registered broker-dealer with at least $10 million in securities owned or managed, and a bank or savings and loan that both (i) owns, or invests on a discretionary basis in, at least $100 million in third party securities and (ii) has an audited net worth of at least $25 million. Examples of QIBs may include business development companies, corporations, ETFs, hedge funds, insurance company, mutual funds and registered investment advisers. A natural person is not considered a QIB. Brokers trading the 144A Shares are responsible for confirming the buyer’s QIB status.
On what platform will the 144A Shares be quoted?
The 144A Shares will be quoted on OTC Expert Market, an SEC regulated alternative trading system using a fully attributable, network-based model for publishing quotes and negotiating trades. Broker-dealers gain access through the proprietary OTC Dealers® user interface or by using OTC FIX protocol. The 144A Shares can be purchased through and held in traditional brokerage and prime broker accounts.
Where can I see quotes of the 144A Shares?
Quotes of the 144A Shares will be available at approximately 50 market data distributors with whom OTC Markets Group has a formal relationship*. The most common names include Bloomberg, FactSet and ICE Data Services.
How are the 144A Shares settled and cleared?
The 144A Shares are settled based on existing terms broker-to-broker, and are cleared through normal channels (FINRA OFR, DTCC). The 144A Shares will be evidenced by one or more global certificates that the Trust will issue to DTC. The 144A Shares are issued only in book-entry form. Shareholders may hold their Shares through DTC, if they are participants in DTC, or indirectly through entities that are participants in DTC.
What are the Trust’s ordinary expenses?
The Trust’s ordinary recurring operating expenses are expected to be the sponsor fee, bitcoin insurance fee, expenses related to the Trust securing its bitcoin and any legal expenses not assumed by the sponsor.
The Trust will either sell (or at its option transfer) bitcoin solely to raise cash to pay the sponsor fee, the bitcoin insurance fee and any other expenses of the Trust that are not expenses assumed by the Sponsor. Please see the Trust Fees and Expenses section of the Offering Memorandum for more detailed information.
What differentiates the 144A Shares from other methods of bitcoin investment?
Direct bitcoin investment:
Crypto hedge funds:
Bitcoin ETNs in Europe:
What is covered by the Trust’s bitcoin insurance?
The Trust will be insured against loss or theft of bitcoin held by the Trust. The insurance will cover loss of bitcoin by, among other things, theft, destruction, bitcoin in transit, computer fraud (i.e., hacking attack), and other loss of numerical codes, known as “private keys”, which are necessary to access the bitcoin held by the Trust. Please refer to the Offering Memorandum for details regarding insurance coverage, including certain exclusions not covered.
What are the Trust’s security practices?
The Trust uses best practice multi-signature cold storage to secure its bitcoin private keys:
How are 144A Shares created and redeemed?
The Trust issues shares only to Authorized Participants in blocks of 4,000 shares called “Baskets” in exchange for bitcoin. Shares may be redeemed by Authorized Participants in Baskets and redemption proceeds will be in bitcoin. Baskets may be created or redeemed on each trading day. The Trust follows the NYSE trading day calendar. Only “Authorized Participants” may request the creation or redemption of a Basket.
The Trust’s shares may be offered only in transactions that are exempt from registration under the Securities Act pursuant to Rule 144A under the Securities Act (“Rule 144A”). Accordingly, the Trust offers Shares in the U.S. only to “qualified institutional buyers”, as such term is defined in Rule 144A (“QIBs”).
Who can be an Authorized Participant?
Each Authorized Participant must:
Each Authorized Participant Agreement provides the procedures for the creation and redemption of Baskets.
What is the basket size for creations and redemptions?
Baskets will be in the range of approximately 4 bitcoin, the equivalent of 4,000 shares.
How will the 144A Shares be priced?
The Trust administrator will calculate the Net Asset Value (“NAV”) of the Trust (i.e., the total assets of the Trust less total liabilities) each trading day based on the price set by the MVIS® Bitcoin US OTC Spot Index (“MVBTCO”) as of 4:00 p.m. E.T. The Administrator also determines the NAV per Share.
What is the MVBTCO?
MVBTCO is a real-time U.S. dollar-denominated composite reference rate for the price of bitcoin. MVBTCO calculates the intra-day price of bitcoin every 15 seconds, including a “closing price” as of 4:00 p.m. E.T. The intra-day price and closing price are based on a methodology that consists of collecting actual firm bid/ask spreads and calculating a mid price from several bitcoin over-the counter (OTC) platforms, all of which are U.S.-based entities, included within the index.
The logic utilized for the derivation of the daily closing index level for MVBTCO is intended to analyze actual firm bid/ask data, verify and refine the data set, and yield an objective, fair-market value of one bitcoin as of 4:00 p.m. E.T. each weekday, priced in U.S. dollars.
Will the Trust’s bitcoin holdings be audited?
Yes. Market practice for Rule 144A offerings is to follow requirements of a public offering in terms of annual audit and ongoing financial reporting. The VanEck SolidX Bitcoin Trust will be audited and its annual audit will be publicly available on its website. Cohen & Co. is the Trust’s independent auditor.
Under what regulatory framework are the 144A Shares issued and what are its constraints?
The 144A Shares are restricted securities. The Securities Act of 1933, as amended provides a safe harbor from registration requirements for certain resales of restricted securities to QIBs.
The JOBS Act in 2012 amended Rule 144A to allow brokers and dealers to offer Rule 144A securities through general solicitations. General solicitation may also increase liquidity for investors in Rule 144A securities if resale platforms develop for such products.
Who can invest in and trade the 144A Shares?
Only QIBs can invest in and trade the 144A Shares.
Can foreigners invest in and trade the 144A Shares?
Yes, as long as they are a QIB.
Is there a minimum investment size for the 144A Shares?
No, there is no minimum investment size aside from the price of one share.
Is there a minimum holding period for the 144A Shares?
No, there is no minimum holding period for the 144A shares.
Will the 144A Shares be “seasoned”?
No, there is currently no intention to season the 144A Shares.