Bitcoin Magazine is reporting that the Bitcoin Investment Trust (BIT) is on track to become the world’s first publicly traded bitcoin fund, thanks to approval from the Financial Industry Regulatory Authority. While it will not technically be an exchange-traded fund (ETF), a loophole will allow the fund’s shares to be sold publicly after they have been held for 12 months. The ticker symbol GBTC has been established for the shares and should be active soon.
The BIT was founded by Barry Silbert in 2013. According to the fund’s website, it is “a private, open-ended trust that is invested exclusively in bitcoin and derives its value solely from the price of bitcoin. It enables investors to gain exposure to the price movement of bitcoin without the challenges of buying, storing, and safekeeping bitcoins.” Essentially, it is designed to make it extremely easy for investors to put money into bitcoin. The trust is also known for purchasing a portion of the bitcoins seized from Ross Ulbricht.
Currently, the fund is only open to accredited investors with an annual income of at least $200,000 or at least $1 million in assets. The minimum investment is $25,000. The loophole mentioned above will permit many more people to access the fund, but it remains uncertain whether or not the shares will actually be traded publicly on a regular basis.
According to a statement issued by the Digital Currency Group, a parent organization of the BIT, “No assurances can be given as to when or if such trading will commence, or that an active public secondary market for BIT shares will develop or be maintained.”
The first real bitcoin ETF will probably be the Winklevoss Bitcoin Trust, which has been in the works for over a year and a half now. Chances are that when it is finally established, it will become a strong competitor of the BIT. It was first proposed by the Winklevoss twins, Cameron and Tyler, in July 2013 and a revision was submitted in February 2014.
Since that proposal involves creating a fully qualified ETF, it must be reviewed by the US Securities and Exchange Commission. That process takes a very long time, but once approved, the fund’s shares will trade on the NASDAQ using the symbol COIN.
Daniel Brown is the editor-in-chief of You, Me, and BTC. There, he co-hosts the planet’s most entertaining Bitcoin podcast and writes about various crypto topics. He also works for Liberty.me, preparing content pages, bug testing, and doing anything else that needs to be done.