“The hope within the bitcoin community is that BIT and future publicly traded bitcoin investment vehicles will improve liquidity and thus help smooth out some of the price volatility that has plagued bitcoin in its early years,” notes PandoDaily. “The fact that BIT is also now a regulated entity should help calm the (justified) fears of many prospective bitcoin investors. A more stable bitcoin market is seen as being a necessary pre-condition for widespread adoption as a payment vehicle.”
The BIT will open bitcoin investing up to the wider world of capital markets and traditional investors who prefer not to trade bitcoin as currency because they are scared by bitcoin’s wild price swings.
The BIT is the first product from Silbert’s new Grayscale Investments, a digital-asset management firm being launched concurrently by his Digital Currency Group. The Wall Street Journalnotes that the BIT is the latest addition to the growing number of bitcoin trading platforms that aim to expand bitcoin investments beyond the volatile spot exchanges and attract a new class of investors.
Image via Grayscale Investments.
Barry Silbert announced on Twitter that the BIT fund is live and waiting for eligible shareholders to deposit their shares and sell.
The Grayscale website notes that digital currencies are poised to radically transform our financial system, but it won’t happen overnight.
Each share of BIT is worth approximately one-tenth of a bitcoin. Holders of BIT shares won’t hold bitcoin in their names, but they will hold shares of the fund, which itself holds bitcoin. Since the value of BIT shares will fluctuate with the exchange rate of bitcoin, the fund will be a convenient investment vehicle linked to bitcoin – in particular, investors will be able to short the fund and profit from drops in the price of bitcoin. The availability of traded funds linked to bitcoin and investment vehicles such as options, futures and other derivatives is expected to contribute to stabilizing the value of bitcoin.
“At Grayscale, we believe investors deserve an established, trusted, and accountable partner that can help them navigate the gray areas of digital currency investing,” the website says. “That’s why we are building transparent, familiar investment products that facilitate access to this burgeoning asset class, and provide the springboard to invest in the new digital currency-powered ‘internet of money.’”
A few weeks ago Bitcoin Magazine reported that the Bitcoin Investment Trust (BIT) was about to become the first publicly traded Bitcoin fund. On Thursday, the BIT received formal approval for listing on the OTC Markets Group’s OTCQX exchange. The fund is listed with the symbol GBTC, and trading is expected to begin early next week.
“Over the past three or four months, a handful of banks have started to experiment,” said Silbert. “Some of them are experimenting around trading, some around using the blockchain for settlement, and some are interested in deploying capital as investors.”
The BIT skipped the lengthy SEC registration process by taking a shortcut approved by the Financial Industry Regulatory Authority (FINRA). Without SEC registration, the BIT can’t formally be considered as an Exchange Traded Fund (ETF), but other funds are seeking SEC approval for listing on the NYSE or Nasdaq. The Winklevoss twins are planning a Bitcoin Exchange Traded Fund (ETF), the Winklevoss Bitcoin Trust ETF, which will be available to investors on NASDAQ with the ticker COIN.
Credit Rating Firm Backs $8 Million Fundraise for Crypto Alternative
A startup looking to build a credit scoring protocol on top of the recently-launched Ontology blockchain has raised $8 million in seed funding.
POINTS, founded in 2017, said it drew funding from a
Barclays Seeks Twin Blockchain Patents for Banking Services
Barclays Bank may be looking to blockchain to streamline fund transfers and know-your-customer processes, according to newly-released patent applications.
The U.S. Patent and Trademark Office publi
Congressman's Call for Crypto Ban Sparks Social Uproar
In the span of a few hours, it became Crypto Twitter vs U.S. Representative Brad Sherman.
On Wednesday, Congress hosted a pair of back-to-back hearings on the topic of cryptocurrencies (read CoinD
Bitcoin could take a major chunk of change from gold, crypto expert says
Bitcoin back above $7,000 has crypto bulls believing in the rally again. To one crypto expert, the leading cryptocurrencyâs long-term move could be stratospheric. Such a move will be fueled by a
Bitcoin hasn't bottomed yet, says crypto trader who predicted it could reach $50,000 by year's end
Bitcoin is rallying. The digital tokens were priced around $7,400 on Thursday at 5:30 p.m. ET â an increase of more than 10 percent from a month ago, according to Coinbase. But Arthur Hayes, the
It Took Just A Day for Tron's Founder to Win His Own Blockchain's Election
An unconventional candidate has triumphed in tron's ongoing blockchain elections: the project's founder Justin Sun.
After announcing his candidacy to become a tron "super representative" (a node on
Ethereum Scaling Solution Raiden Releases Last Testnet Before Launch
A new test network has been launched for Raiden, the ethereum payments channel project.
Announced at the Dappcon developer conference in Berlin on Thursday, the release features a minimal implement
Malta Stock Exchange Inks Deals to Build Security Token Exchanges
MSX, the newly launched fintech arm of the Malta Stock Exchange, has inked several new deals aimed at creating new marketplaces for tokenized securities.
The newly inked deal sees MSX team up with