GBTC is about to get some competition...

According to an S-1 Registration Statement filed with the SEC yesterday there is likely to be a new Bitcoin Fund on the way...

This fund will function very similar to the way that GBTC from Grayscale currently does.

While not an ETF, the fund will be physically backed by BTC and investors can purchase shares in the fund that are designed to track very closely the spot price of BTC.

From the Registration Statement:

"The 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."

(Source: https://www.sec.gov/Archives/edgar/data/1811978/000091957420004103/d8556761_s-1.htm)

The fund will use the CME's Bitcoin price index as a reference point and the bitcoin will be custodied by Fidelity.

This is great news for the industry...

While not the ETF everyone is hoping for, this is darn close and will offer much need competition to Grayscale's GBTC fund.

Which is important because GBTC has almost always traded at a premium to its NAV (net asset value) due to no other options for those looking to buy bitcoin without going to the derivative or spot markets.

There are still many institutions and larger funds that are not able to buy bitcoin and cryptocurrencies due to their unregulated exchanges/markets.

Plus there is always the issue of custody.

Many large funds would gladly pay the 2% (or .9% in this case) custody fee not to have to worry about taking custody of millions or billions worth of bitcoin.

Getting products like GBTC and this new fund from Wilshire Phoenix will open up more avenues and options for them.

This is very good news, especially since it will be physically backed by actual bitcoins instead of just a way to bet on the price of bitcoin like the CME futures products essentially are.

The financialization of bitcoin has begun.

Stay informed my friends.

Image Source:

https://zephyrnet.com/after-bitcoin-etf-rejection-wilshire-phoenix-moves-for-trust-fund-approval/

-Doc

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