22. Juni 2020

Wilshire Phoenix files SEC clearance for Bitcoin-backed public investment fund

The alternative investment firm Wilshire Phoenix has filed an S-1 registration statement with the U.S. Securities and Exchange Commission, or SEC, for a Bitcoin listed fund, in accordance with the regulations. The log says:

„The shares will provide investors with exposure to bitcoin in an accessible and cost-effective manner without the uncertain and often complex requirements associated with acquiring or holding bitcoin“.
Wilshire’s new Bitcoin Commodity Trust aims to make its shares available for public trading on the OTCQX Best Marketplace of OTC Markets Group, Inc. Once issued, the trust shares can be bought and sold throughout the trading day like any other publicly traded security, the file adds.

What does Grayscale’s declining GBTC premium tell us about the price of Bitcoin?

Wilshire product backed by Bitcoin
Similar to Grayscale’s Bitcoin Trust (GBTC), Wilshire’s BCT aims to enable the retail public to buy Bitcoin through shares in the main market, with each share backed by Bitcoin and at the price of Bitcoin according to the market rate.

The Bitcoin value of the BCT will follow a The News Spy price index listed on the Chicago Mercantile Exchange, or CME. Known as the Bitcoin CME CF Reference Rate, or BRR, the index tracks the price of Bitcoin across multiple industry exchanges, which is the same rate used by the CME to cash-settle its regulated Bitcoin Futures. CME, in part, uses the fee to set the prices of its Bitcoin futures trading products.

Grayscale applies to become the first Bitcoin fund to report to the SEC
However, GBTC often has a high premium, which means that customers pay significantly higher prices compared to buying real Bitcoin on the crypto market. This includes a 2% annual custody fee. Wilshire Phoenix’s new application proposes a lower rate of 0.9%:

„Except for transaction costs associated with the purchase and sale of bitcoin, the main recurring expense of the Trust is expected to be the sponsorship fee, which will be determined by applying an annual rate of 90 basis points (0.90%) to the Trust’s NAV (the ’sponsorship fee‘).