Bitcoin Investment Trust has recently announced that FINRA (Financial Industry Regulatory Authority) approves the trust to become the first publicly traded Bitcoin Fund.
— Bitcoin Trust (@BitcoinTrust) March 1, 2015
When the fund launches, it will beat the Bitcoin ETF to market, that Winklevoss Twins want to operate and wish to be the first publicly traded Bitcoin fund in the United States. The fund will make an appearance at using BTCV ticker on the platform of OTC Markets Group (OTCQX).
The Bitcoin Investment Trust is a private, open-ended trust that obtains its value merely 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 large amounts of Bitcoin.
According to its website, the BIT is sponsored by Grayscale Investments LLC, a wholly-owned subsidiary of SecondMarket Holdings, Inc. and an affiliate of SecondMarket, Inc.
The BIT was launched in 2013 by Barry Silbert. Mr. Silbert is considered as one of the most active venture capitalists in the industry with investments in over 30 Bitcoin-related companies through the Bitcoin Opportunity Corp.
During the interview for Mauldin Economics in December, 2014, Barry Silbert discussed the future of Bitcoin and divided Bitcoin adoption in five general phases:
- Experimentation Phase (2009–2010): No real value is associated with Bitcoin. Hackers and developers are playing around with the source code. Experimenting with Bitcoin as a medium of exchange takes place.
- Early Adopters Phase (2011–2013): Interest from investors and entrepreneurs started to increase with substantial press coverage in the wake of the Silk Road First generation of Bitcoin-related companies started. Potential began to shine through poor management.
- Venture Capital Phase (2013–Present): World-class VCs started investing in Bitcoin companies and rapid rise is already outpacing the early days of the Internet. VCs poured more than $90 million into Bitcoin-related businesses in 2013 and more than $300 million in 2014 (compared to $250 million invested in Internet-related businesses in 1995).
- Wall Street Phase (2015?): Institutional investors, banks, and broker-dealers begin exchanging money into Bitcoin. Rising price and volume in addition to development of derivatives become the catalyst for mass adoption as retail investment follows.
- Global Consumer Adoption Phase (?): Only happens if (i) companies continue to innovate and make it easier for consumers to buy, hold, and spend Bitcoin, (ii) volume expands dramatically so that large merchants can start accepting payment in Bitcoin, and (iii) Bitcoin awareness continues to rise with these developments.
On the whole, since Bitcoin Investment Trust is opened to the public, anyone can invest in BIT through their brokerage regardless their income levels and net worth. One of the big achievements for investors would be ability to invest in BIT and therefore gain exposure to Bitcoin’s price through a 401(k) or IRA.
This broadens a huge market for Bitcoin to reach everyday investors, who are eager to develop away from stocks and bonds and gain exposure to a relatively newer asset class, for a small percentage of their retirement portfolio.