After Bitcoin ETF Rejection, Wilshire Phoenix Moves for Trust Fund Approval

13 Jun, 2020 Updated 22 Jul, 2022

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Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on X at @nivishoes or mail him at nivesh(at)coingape.com

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Wilshire Phoenix, a Newyork based investment company seems determined to launch a Bitcoin-only retail investment product. After the rejection of the ETF proposal by the SEC in February, the Financial Services firm is now looking to compete with Grayscale’s Trust Fund products, but on a larger scale.

Earlier this year in February, the SEC rejected the Bitcoin ETF approval ‘citing a lack of proof that the Bitcoin market cannot be manipulated.’ A Bitcoin ETF is important because of its ability to reach out to retail investors, pension funds, and mutual funds with minimal custody risks. Until now, the facility has been available only to accredited investors and institutions via the Grayscale Trust Fund.

Publicly Traded Bitcoin Fund

It is a Bitcoin-only fund as the filing cites that ‘The Trust will have no assets other than bitcoin.’ Wilshire Phoenix proposes that the shares be made available for public trading on OTC Markets Group, Inc.’s OTCQX Best Marketplace.

bitcoin commodity trust fund filing — Bitcoin Commodity Trust Fund Filing (Source)

The price of Bitcoin [BTC] will be procured from CME CF BRR (Bitcoin Reference Rate) to calculate the NAV, similar to know it’s done on Grayscale. Moreover, Fidelity Digital Assets will act as physical custodians of the Bitcoins.

The filing lists a plethora of risk factors and conditions that could affect the fund in any way, and how they are planning to mitigate the risks. This includes geopolitical risks, regulatory risks, or even sudden loss of confidence in crypto exchanges due to a hack or discovery.

The Trust Fund is similar to Commodity ETF (Exchange Traded Funds) which gives exposure to the futures/derivatives contracts of physical commodities. Popular types of commodities include precious metals, such as gold and silver, and oil and gas. Although, the Bitcoin Commodity Trust will only keep custody of the Bitcoins, and will not engaging in derivatives buying/selling. The sponsor fee is 0.9% and the premium will be calculated on the basis on the market.

Do you think the SEC will approve the Trust Fund? Please share your views with us.

Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.

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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more… to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.