The growth and appreciation of institutional interest in the Bitcoin space is really starting to ramp up as 2020 looks prime to be the year for big money to enter the market from the troubled traditional markets following the Covid-19 pandemic. There has been a lot of rumbling from the institutional investors, and now a new option will be provided for them.
Investment firm Wilshire Phoenix, who has had its attempts at launching a Bitcoin ETF, has filed with the SEC for a tradeable Bitcoin fund similar to the Grayscale Bitcoin Trust. Grayscale has been in the headline this year too as it was found to be buying up a large portion of the newly minted Bitcoins following the halving event in May.
The registration filed with the SEC reads:
“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.”
It will have these shares available for public trading on OTC Markets Group, Inc.’s OTCQX Best Marketplace. Once issued, these shares then become available to be bought and sold throughout the trading day like any other publicly traded security.
Grayscale has been lauded as a major way for institutional investors to be part of the volatile Bitcoin space, and it has had most of the access to these types of investors, although there have been growing alternatives cropping up for traditional investors to try.
This latest move from Wiltshire Phoenix will seemingly be competition for Grayscale, but for the growth of the institutional interest in Bitcoin, it can only be seen as a good thing.
Wiltshire’s offering aims will each be backed by Bitcoin and priced according to Bitcoin’s going market rate. This rate will come from CME, known as the CME CF Bitcoin Reference Rate, or BRR, the index tracks Bitcoin’s price across multiple industry exchanges, which is the same rate used by the CME to cash settle its regulated Bitcoin Futures.
One way Wiltshire is trying to position itself early as a more popular choice than Grayscale is that they will have a lower fee, in the region of 0.9%, compared with the 2 percent premium from Grayscale.
“Except for transaction costs associated with the purchase and sale of bitcoin, the Trust’s primary recurring expense is expected to be the Sponsor’s fee which will be determined by applying an annual rate of 90 basis points (0.90%) to the Trust’s NAV (the ‘Sponsor’s Fee’),” it was explained.