BlockFi Launches the BlockFi Bitcoin Trust
Investment vehicle will deliver easy access to BTC for institutions and accredited individual investors, feature management fee of 1.75% and custody protections for investors
BlockFi, a financial services company dedicated to building a bridge between cryptocurrencies and traditional financial and wealth management products, announced the launch of the BlockFi Bitcoin Trust, an investment vehicle for investors seeking access to Bitcoin (BTC), the leading digital asset. The entry of the Trust into the market will provide investors with an alternative, more cost-effective entry point to the crypto market compared with similar existing products.
Investment trusts are among the most popular methods for major institutions to invest in BTC. The Trust will issue shares via 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. 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 U.S.
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Initial subscribers to the Trust are expected to include BlockFi and select institutional investors, using BTC to subscribe. Upon the expiration of an initial lockup, shares may become available for secondary investment on a wide range of recognized brokerage platforms.
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 (Fidelity Digital Assets) 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.
“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,” said Zac Prince, Founder & CEO of BlockFi. “As we work to broaden the availability of this vehicle to retail brokerages, we expect this product will facilitate greater investments in digital assets – at the core of BlockFi’s mission in bridging crypto with traditional finance.”
“We believe a trust structure for this product is beneficial for investors and will play an important role in improving access in this nascent market,” added Yevgeniy Feldman, Vice President for Institutional Services at BlockFi. “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.”
“The digital asset ecosystem has grown significantly in recent years, creating an even more robust marketplace for investors and accelerating demand among institutions,” said Christine Sandler, Head of Sales and Marketing for Fidelity Digital Assets. “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. Like BlockFi, we believe pairing innovative products with institutional-grade solutions that provide high caliber security will help enable broader adoption of digital assets.”
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