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Wilshire Phoenix files for publicly-traded Bitcoin Trust with lower management fees compared to Grayscale’s GBTC

Wilshire is filing for a new publicly-traded Bitcoin-backed trust with the SEC.

Image by Pete Linforth / Pixabay

Wed, 17 Jun 2020, 21:46 pm UTC

Investment firm Wilshire Phoenix might soon be challenging the dominance of Grayscale Investments’ $3.4 billion bitcoin trust (GBTC). The company has filed with the Securities and Exchange Commission for a publicly-traded trust called Bitcoin Commodity Trust (BCT).

In Wilshire Phoenix’s June 12 wiling with SEC, the investment firm plans to offer 80,000 shares at a maximum price of $25 per share, according to Bitcoin.com. This will enable the company to raise $2 million, which will be used to buy Bitcoin.

The publicly traded Bitcoin Commodity Trust will make it easier for investors to invest in the cryptocurrency. “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,” the company said.

The trust will contain one cryptocurrency as it filing says that it “will have no assets other than bitcoin.” However, it also clarified that the trust “may hold U.S. dollars for short periods of time,” which will be used for buying and selling BTC as well as for the settlement of redemptions and fees.

The custody of the trust’s Bitcoin holding will be handled by Fidelity Digital Asset Securities and the digital asset will be insured against theft above $100 million. Meanwhile, the fund’s dollars will be placed with Umb Bank and will be covered by the Federal Deposit Insurance Corporation.

Shares of Wilshire’s BCT will be available for public trading on OTC Markets Group, Inc.’s OTCQX Best Marketplace, according to CoinTelegraph. Just like any publicly traded security, BCT shares can be sold and bought throughout the trading day.

If approved, Wilshire’s Bitcoin Commodity Trust would be competing against the multi-billion Grayscale Investments Bitcoin Trust (GBTC). The latter has 365,000 BTC under management valued at around $3.35 billion.

However, Bitcoin Commodity Trust has some advantages over GBTC. BTC has a lower proposed management fee of only 0.9 percent compared to GBTC’s 2 percent. Moreover, Wilshire's BCT shares are redeemable, unlike Grayscale’s product where it is stated on its site that GBTC “does not currently operate a redemption program and may halt creations from time to time.”

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