With Only 2 Weeks In, BlockFi Bitcoin Trust Just Slightly Under $100M, as Second BTC ETF Goes Live on Toronto Stock Exchange

Zac Prince, CEO and Co-founder at BlockFi, a fast-growing digital assets platform, notes that with just two weeks in, the company’s Bitcoin trust is just ”a pinch” under the $100 million mark (in total BTC holdings).

As confirmed on the website tracking the trust, its Bitcoin holdings are valued at nearly $97 million (as of February 19, 2021). The trust’s Bitcoin holdings per share are at $55.28, and there are 1,752,909 such shares outstanding (at a Bitcoin index price of $55,319.99 as of February 19, 2021).

On February 9, 2021, BlockFi had launched its Bitcoin trust.

According to a release, the investment vehicle will aim to offer convenient access to BTC for both institutions and accredited individual investors and will have a management fee of 1.75% and will offer custody protections for investors.

BlockFi Inc., a financial services firm focused on forming a bridge between cryptos, traditional financial and wealth management services, confirmed the launch of the BlockFi Bitcoin Trust (earlier this month)

BlockFi described the trust as an investment vehicle for investors looking to gain exposure to Bitcoin. The launch of the Trust will aim to offer investors with an alternative, “more cost-effective entry point to the crypto market compared with similar existing products.”

Investment trusts have become quite popular because they give institutions an easy way to invest in BTC. The Trust will be issuing shares through private placements, and the investment objective of the Trust is for “the value of the shares to reflect the value of BTC held by the Trust less the Trust’s expenses and other liabilities,” the announcement had confirmed.

Trust shares will be “available to global institutions and other qualified investors in the near-term, and later this eligibility will be expanded to include accredited individual investors in the US,” the release noted.

The initial subscribers to the Trust are “expected to include BlockFi and select institutional investors, using BTC to subscribe.” After the expiration of an “initial lockup,” shares may “become available for secondary investment on a wide range of recognized brokerage platforms.”

The release had also mentioned:

“As sponsor of the Trust, BlockFi Management LLC, a wholly owned subsidiary of BlockFi, will charge a sponsor fee of 1.75%. BTC held in the Trust will be custodied by Fidelity Digital Assets Services, LLC through an enterprise-grade custody solution purpose-built for institutional investments. Davis Polk & Wardwell LLP is legal counsel to BlockFi in connection with the Trust, with Coin Metrics Inc. providing index and pricing data and Grant Thornton LLP serving as financial statement auditor.” 

Prince had noted that “given the level of institutional activity in recent months and demand for new, professional-grade investment vehicles, the timing of BlockFi Bitcoin Trust is ideal.”

He also said that they are expecting this product will be able to “facilitate greater investments in digital assets,” which is “at the core of BlockFi’s mission in bridging crypto with traditional finance.”

Yevgeniy Feldman, VP for Institutional Services at BlockFi, had remarked:

“The BlockFi Bitcoin Trust can more easily meet rapidly growing demands from the public to invest in digital assets, and our decision to custody the Trust’s holdings with Fidelity Digital Assets will help give shareholders peace-of-mind in the security of their investments.”

Christine Sandler, Head of Sales and Marketing for Fidelity Digital Assets, noted:

“An increasingly wide range of investors seeking access to Bitcoin has emphasized the need for a more diversified set of products offering exposure to the asset.”

Indeed, as the digital assets market continues to grow rapidly with Bitcoin’s market cap recently surpassing the $1 trillion mark, investors will be looking for a much wider range of options to gain exposure to this nascent asset class.

Evolve Funds Group Inc. announced on February 19, 2021, the launch of the Bitcoin ETF (EBIT). EBIT has reportedly closed its initial offering of units and has now started trading on the Toronto Stock Exchange (TSX) under the ticker symbol EBIT.

Raj Lala, President and CEO at Evolve, remarked:

“The recent institutional adoption has helped further legitimize the progress of Bitcoin. Being able to offer an ETF which holds physical bitcoin is a real game changer in Canada. Now investors may participate in Bitcoin via their brokerage accounts within their RRSP and TFSA. Bitcoin has proven to be a store of value that is uncorrelated to other major asset classes – and has now emerged as an asset class itself.”

As confirmed in a release shared with Crowdfund Insider, EBIT will offer investors with exposure they may want to the daily price movements of the US dollar price of Bitcoin by “utilizing the benefits of the creation and redemption processes offered by the exchange-traded fund structure.”

Investors in EBIT will have the option to directly own Bitcoin “on the Bitcoin blockchain in a cold wallet.” Gemini Trust Company, LLC will be serving as the Sub-Custodian “in respect of the EBIT’s holdings of Bitcoin.”

David Abner, Head of Business Development at Gemini Trust Company, LLC., stated:

“Crypto presents unique challenges for fund issuers and utilizing Gemini for fund services like custody, execution and clearing provides real comfort to investors. We have a unique understanding of both the ETF and Crypto ecosystems and bring this knowledge to every product we support.”

EBIT will “not seek exposure through derivatives or futures contracts.” The daily NAV will be “based on the CME CF Bitcoin Reference Rate, a once-a-day benchmark index price for bitcoin denominated in U.S. dollars.”

Elliot Johnson, CIO and COO at Evolve ETFs, noted:

“We’re proud to partner with the world’s first regulated crypto benchmark administrator, CF Benchmarks, that offers a fully transparent methodology and relies on real-time data from five Bitcoin exchanges including Gemini, itBit, Coinbase, Kraken and Bitstamp.” 

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