By
Chimamanda U. Martha
April 25th, 2024
The Initial Public Offering for the Bitcoin Trust was completed for 230 million Canadian Dollars, equivalent to around 180 million USD.
Ninepoint Partners LP has gone public with its Bitcoin Trust shares following the footsteps of Grayscale Bitcoin Trust (OTCMKTS: GBTC). The company announced the listing of the shares on the Toronto Stock Exchange and revealed that they have no intention of selling them in the US.
According to John Wilson, the CEO and managing partner of Ninepoint, this is the largest Initial Public Offering (IPO) of a Bitcoin Fund in the country (Canada) ever.
The Initial Public Offering for the Bitcoin Trust was completed for 230 million Canadian Dollars, equivalent to around 180 million USD. Also, the company will issue three different classes of 17,990,491 units for $10. It is worth noting that this is more than 7 million of the shares under the ticker BITC.U and BITC.UN for both the Canadian Dollar and the US Dollar available for trading on the Toronto Stock Exchange.
An annual management fee of 0.70% of the net asset value which is said to be calculated each day and paid monthly will be effective. Ninepoint has an interesting goal for this initiative which is to expose new investors to Bitcoin and other digital currencies.
Wilson stated that the rolling out of the Initial Public Offering will be the bedrock for the growth and success of their Digital Asset Group.
“We believe our institutional quality trust structure then the lowest management fee of any listed Bitcoin investment fund in Canada will be a winning combination for continued investor interest,” he added.
The initiative of Grayscale which has been a model for other companies has successfully introduced several institutional investors to the cryptocurrency Industry. It is expected that this will have a long-term impact on the cryptocurrency market as new investors may come on board to drive the price up on the price-curve.
Critics have questioned the Bitcoin-as-a-trust model. On Grayscale, Bitcoin has been traded at a large premium to the said asset.
Critics hold the view that investors will have a good deal buying Bitcoin directly from Coinbase L.T.D and other exchanges. Despite these criticisms, Grayscale defied all odds to gain a lot of attention from institutional investors in 2020 as it provided an easy means for them to gain cryptocurrency exposure. Most institutions have bylaws that prevent them from buying cryptocurrency directly from third-party exchanges. This means Grayscale and other similar platforms are very good options for them.
On the condition of anonymity, the trust structure has been said to have a loophole with some prominent executives predicting that the US Securities and Exchange Commission (SEC) will either close it or finally approve the ETF. Ninepoint is currently making use of a popular cryptocurrency entrepreneur and an author of many books on Fintech and Blockchain, Alex Tapscott, to help educate the masses on Bitcoin as an asset.