This week, accredited investors will be receiving the fourth fund from Bitcoin Investment Trust’s creator that is meant to assist them in the exploration of cryptocurrencies.
Michael Conmanship, the managing director of Grayscale mentioned that both decisions to sidestep other cryptocurrencies offered by Grayscale and to include new currencies were on the basis of the total value of the assets. Michael continued by saying in an interview that investors were interested in big market exposure, particularly to the lucrative digital currency asset class. Mr. Sonnenshein told CoinDesk that it will provide them with a good opportunity of making a singular investment. This will, in turn, provide with exposure to roughly 70% of the market.
It will have to be rebalanced every quarter to accommodate changes experienced by the cryptocurrency market caps. This potentially eliminates existing digital assets and incorporates new ones. It should be noted that the fund is not actively managed since it is a passive investment vehicle. Apart from the market cap, other factors to be weighed during listing are the availability of custodial solutions, operational requirements, and liquidity.
Furthermore, there will not be a redemption program to be offered at the fund’s launch. This means that there is no guarantee that shares’ value will approximate the real value of the fund’s assets. The fund’s shares are being offered on an ongoing basis to specific accredited investors as the US Securities and Exchange Commission (SEC) prescribes.
However, in the last few months, the total assets of a subsidiary of Digital Currency Group that Grayscale is managing has dropped by close to $1 billion. The month of December saw the founder of DCG called Silbert tweet that they were managing $3 billion. However, the current state has seen the number dwindle to $2.1 billion. The shares might trade at a good premium above the underlying asset like has been the case with previous funds of Grayscale, but it must be quoted on secondary markets in the future.
The official press release from Grayscale indicates that it intends to seek regulatory approval eventually to operate a redemption program of this type. Mr. Sonnenshein further mentioned that they intend to see through the path their first investment vehicle set i.e. the Bitcoin Investment trust that trades over the counter. It uses GBTC:OTCQX at its ticker symbol. He said that they intend to make a public quotation concerning the matter in a year or so.