Bitcoin Investment Trust Receives FINRA Approval

Mar 3 2015 | 5:51am ET

Barry Silbert’s Bitcoin Investment Trust (BIT) has received approval from FINRA to become the first publicly traded bitcoin fund.

BIT launched in 2013 as a private fund for accredited investors, and took advantage of a legal loophole that allows public fund holders to sell their shares into the secondary market after a 12-month waiting period. Each share of the trust is worth around one-tenth of a bitcoin.

The announcement pushed the price of bitcoin up roughly 9%.

The fund has been assigned a temporary ticker of BTCV on the OTC pink sheets, but it is expected to trade under the symbol GBTC once final approvals are obtained. Quotations will then be available from OTCQX, the highest tier marketplace operated by OTC Markets Group, according to Silbert.

The lack of a publicly traded investment vehicle for exposure to bitcoin has given many institutional investors, hedge funds and other asset managers pause in allocating capital to the digital currency despite keen interest in what has been to date an uncorrelated, thinly-traded and volatile asset. As more sophisticated trading instruments arrive, with greater regulatory oversight, bitcoin enthusiasts believe better liquidity and wider engagement by the institutional investment community will result.

In addition to Silbert’s BIT, the Wilklevoss twins of Facebook fame are guiding a bitcoin ETF through the SEC approval process and filed to sell 1 million shares under the apt symbol COIN in January. Meanwhile, TeraExchange has launched the first CFTC-regulated trading platform for bitcoin swap contracts and a number of startups are developing a broad range of derivative instruments and trading infrastructure for the nascent asset class.

Investors are taking note. Ray Dalio’s Bridgewater Associates has reportedly been looking to hire a bitcoin trader, while Fortress has been engaged in the bitcoin ecosystem since 2013 and venture capital activity in the industry topped $330 million last year.

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