As further proof that bitcoin is moving beyond the circles of crypto-anarchists and into the world of traditional finance, a blockchain technology developer recently filed a request to offer the world’s most popular digital currency as an exchange traded fund (ETF).

According to various news reports, the blockchain provider in question is SolidX Partners. A press release issued by the company indicates that it filed a registration statement Form S-1 with the United States Securities and Exchange Commission (SEC). The S-1 filing specifically seeks to register the SolidX Bitcoin Trust, an ETF that will provide individuals and institutions with an easy way to invest in bitcoin.

Should the Form S-1 be approved by the SEC, the SolidX Bitcoin Trust ETF will be listed in the New York Stock Exchange as XBTC. This would be the first Wall Street instrument to give prospective investors an opportunity to be exposed to the daily exchange rate of bitcoin against the U.S. dollar.

How a Bitcoin ETF Would Work

ETFs are among the most exciting securities traded on Wall Street. They are similar to mutual funds in the sense that they are managed by financial professionals with the intent of maximizing value for shareholders; however, ETFs are managed in such a way that they track other instruments.

The advantage of ETFs over mutual funds is that they can be traded just like any other stock. ETF prices can change throughout a trading session, and they can be purchased and sold just like other stocks.

In the case of the SolidX Bitcoin Trust ETF, the underlying asset being tracked is a commodity; specifically, the BTC/USD currency pair. The fund managers in charge of XBTC will operate the trust portfolio in a manner that reflects the exchange rate between bitcoin and the U.S. dollar.

The advantage XBTC would offer to investors is the solid backing of the New York Stock Exchange and its sheer liquidity. Needless to say, XBTC will prove very attractive to institutional investors such as pension funds and investment banking firms that have mostly kept to the sidelines in relation to bitcoin.

Depending on how XBTC is priced, each share could represent a portion of the going BTC/USD price or a whole currency pair unit. In other words, purchasing XBTC shares could be somewhat similar to buying bitcoin on a reputable exchange such as Coinbase, with the added advantage that investors do not have to worry about low volume or paying excessive currency exchange fees when they wish to collect profits.

The press release by SolidX lists Bank of New York Mellon as trustee and custodian of its liquid assets; this is clearly an enticement for institutional investors who are concerned about due diligence and matters of compliance.

XBTC Competition

SolidX is not the only investment firm seeking to offer bitcoin on Wall Street. There’s also the Winklevoss Bitcoin Trust, which is held by the famous early co-founders of Facebook, the Winklevoss twins.

It so happens that XBTC has an interesting feature to compete against the Winklevoss Bitcoin Trust: insurance. SolidX wants to provide investors with peace of mind by offering three levels of insurance that would offset losses that may be prompted by crime and other mishaps.