BlockFi Bitcoin Trust Launched: One More Way for Institutions to Invest in $BTC

On Tuesday (February 9), crypto-focused financial services firm BlockFi Inc. announced the launch of the BlockFi Bitcoin Trust.

BlockFi was founded in 2017 by Zac Prince and Flori Marquez with the aim of “providing credit services to markets with limited access to simple products like a savings account.” BlockFi “sets itself apart from other cryptoasset service providers by pairing market-leading rates with institutional-quality benefits.”

This independent lender is backed by investors such as Valar Ventures, Galaxy Digital, Fidelity, and Coinbase Ventures. BlockFi has offices in New York, New Jersey, Poland, and Argentina. Its main crypto custodian is Gemini Trust Company, LLC, which is a New York trust company regulated by the New York State Department of Financial Services (NYDFS).

On January 29, BlockFi filed a Form D with the U.S. Securities and Exchange Commission (SEC) to register its intention to do a private placement of securities.

According to BlockFi’s press release, “investment trusts are among the most popular methods for major institutions to invest in BTC.” The BlockFi Bitcoin 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.” The 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.”

The press release goes on to say:

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.

The annual management fee is 1.75%. Custody for the bitcoins in the trust is being take care by Fidelity Digital Assets Services, LLC.

Zac Prince, Co-Founder and CEO of BlockFi, had this to say:

“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. 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.”

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The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

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