So asset managers are rethinking their playbooks. VanEck this month started a Bitcoin fund that can only be bought by sophisticated investors, and then put its ETF on ice days later. The VanEck SolidX Bitcoin Trust 144A Shares is available to qualified institutional buyers, such as hedge funds, but could ultimately pave the way for a retail-focused fund.

The remaining contenders -- Bitwise Asset Management and Wilshire Phoenix -- are sticking with their ETF proposals but both have sought to differentiate their funds from those that ended up on the scrapheap.

“Our strategy has been we’re going to use the best practices of ETFs generally, we’re going to take no shortcuts,” said Hunter Horsley, Bitwise’s chief executive officer. “We’re going to do the heavy legwork of hundreds of pages of research to show why we don’t have to take shortcuts -- and so there will be no compromises in the design of the fund.”

Bitwise’s fund will use prices pulled from 10 exchanges to gauge the value of Bitcoin, tackling another regulatory bugbear. The San Francisco-based firm has also briefed SEC staff on industry steps to address their concerns and has started several funds for accredited investors in a bid to prove that these investments work. A decision on the ETF is expected by Oct. 13.

Meanwhile, Wilshire Phoenix wants to offer a mix of Bitcoin and short-term Treasuries, using the bills to cushion against crypto volatility. The watchdog announced last week that it would again delay a decision on the proposal, and sought comment on its structure.

“There are numerous features that set it apart from the others,” said Bill Herrmann, Wilshire’s founder and managing partner. This “important mix of features presents the perfect vehicle for investors.”

Still, these asset managers might not have free rein for long. Any sign that the SEC is getting even slightly more comfortable with the concept could spur others to re-enter the race. GraniteShares could return if it can see a solution to the regulator’s problems, said Giannotto, and VanEck hasn’t given up on a Bitcoin ETF either, according to Gabor Gurbacs, the company’s director of digital asset strategy.

The 144A product is an “excellent” vehicle for qualified institutional buyers that want ETF-like Bitcoin exposure, said Gurbacs. But “we maintain our plans to bring to market a publicly-traded, physical and insured Bitcoin ETF.”

This story provided by Bloomberg News.

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