Since more and more institutional investors have their eyes on Bitcoin, the competition between crypto investment products is rising.
The New York-based asset management company Wilshire Phoenix filed a registration with the Securities and Exchange Commission (SEC) on June 12 to launch a new Bitcoin Investment Trust. The new trust will be offering shares in its initial public offering (IPO).
As the document states, the Bitcoin Commodity Trust will be devoted to the single asset Bitcoin, although the US dollars could be held for the short periods as well, mainly in order to purchase and sell Bitcoins or make payments of any redemption of the shares. According to the filling:
Shares will provide investors with exposure to bitcoin in a manner that is accessible and cost-efficient without the uncertain and often complex requirements relating to acquiring or holding bitcoin.
The shares are expected to reflect the value of Bitcoin held by the Trust, which is based on the Chicago Mercantile Exchange Bitcoin Reference Rate. The new Bitcoin investment trust will be offering the maximum amount of 80.000 shares, although the document states that additional shares might be issued in the future from time to time.
Reportedly, the company aims to trade shares of its Bitcoin Commodity Fund on OTCQX, provided by OTC Markets Group. The over-the-counter (OTC) market is the decentralized market, where transactions between both trading parties could be done directly.
The price of the initial public offering (IPO) is currently set at $25. As stated in the official document, “the Trust’s net asset value (NAV) will be determined on each business day at 4:00 New York time or soon thereafter”.
It is already known that trust’s Bitcoin funds will be held by Fidelity Digital Asset Services.
The competitor for Grayscale?
Since institutional investors are showing the increasing interest in cryptocurrency assets, the latest move of Wilshire Phoenix might be considered as an attempt to create a competition for the currently leading digital currency investment firm Grayscale Investment.
The company became widely known across the crypto community, after Grayscale’s Bitcoin Investment Trust (GBTC) has bought up to one-third of all newly minted Bitcoins within three months to Bitcoin halving on May 11. Grayscale Investment is the biggest crypto asset manager, with a solid institutional client list. As it is known, the major part of GBTC clients is traditional financial institutions that are considering cryptocurrencies as a hedge against inflation.
Meanwhile, Wilshire Phoenix is aiming to launch Bitcoin financial instruments not for the first time. The asset manager was rejected by the SEC earlier this year with its proposal to create a Bitcoin exchange-traded fund (ETF).