Since 2013, Barry Silbert’s Bitcoin Investment Fund (BIT) has been one of the most logical ways for institutional investors to enter the bitcoin market. Although there has been plenty of discussion around the upcoming bitcoin ETF from the Winklevoss Twins that may soon be tradeable on the NASDAQ, it seems that the BIT has beaten the infamous twins to the punch as the first publicly traded bitcoin fund. The ticker for the fund will be GBTC, and Silbert has noted that it “is expected to be effective shortly.”
Months of delays
Knowledge of a publicly traded fund coming from the Bitcoin Investment Trust has existed for quite some time, and there have been plenty of delays along the way. Originally, it was thought that the public fund would launch in the fall of 2014, and the majority of the bitcoin community is likely pleased to find out that the launch now seems to be imminent. The recent movements forward in the timeline of the release of the fund have come thanks to an approval of the investment vehicle by FINRA. The fund will be listed on the OTCQX, which is an over-the-counter exchange that is regulated more severely than some of the other available options.
What does this mean for bitcoin?
For now, it seems that this announcement has had a positive effect on the bitcoin price. Prior to the official announcement, some were forecasting an uptick in the bitcoin price whenever a publicly traded bitcoin fund became available, while others believed this sort of announcement was already priced into the market.
The ease of purchasing bitcoin directly from an E-Trade or Fidelity account will be attractive to some, but there will be plenty of bitcoin purists who believe everyone should be in control of their own private keys. In reality, the increased liquidity that is likely to come to the bitcoin market from this new method of gaining exposure to the digital currency should be viewed as a positive. More liquidity should lead to a more stable bitcoin price, which should then lead to a larger amount of adoption in the future.
As of the time of this writing, the bitcoin price is up roughly 8% from $250 to $270 per bitcoin in response to the announcement of the publicly traded bitcoin fund.
Price movement prior to the announcement
It should be noted that there was also a bit of bitcoin price movement at the end of last week, before the announcement of the publicly traded fund. Many were attaching the price movement to PayPal’s decision to block subscription payments to cloud storage provider MEGA, but some are now saying that this could have been someone with inside knowledge of the GBTC announcement to come on Monday. Of course, there’s no way to know one way or the other, but it’s something for traders to keep in the back of their minds for now.