BlockFi Launching its Bitcoin Trust Fund to compete with Grayscale
BlockFi (a renowned cryptocurrency saving and lending company) has announced launching its bitcoin fund, called the BlockFi Bitcoin Trust. It is meant for institutional investors. This new Bitcoin Trust of BlockFi will take on Grayscale and offer services at more competitive prices. BlockFi is a renowned name in the crypto world. It helps you buy and earn interest on your cryptocurrency. This company also enables you to borrow money without selling your assets.
The announcement says that the BlockFi Management LLC will use Coin Metrics’ pricing data and indexing services. A reputable accounting firm, Grant Thornton, will audit the financial statements. Grant Thornton is well known for providing services to Coinbase, a reputed American exchange. A BlockFi partner, Fidelity, will reportedly provide custody services in this new endeavor.
BlockFi’s Vice President for Institutional Services, Yevgeniy Feldman, has said:
“We believe that a trust structure for this product is beneficial for investors. It will play an important role in improving access to this emerging market. The BlockFi Bitcoin Trust can more easily meet growing public demand to invest in digital assets.”
The management of BlockFi believes that their new Bitcoin Trust will help to capture the booming market of institutional investors, who increasingly want to invest in Bitcoin. They expect that Tesla’s decision to invest US$1.5 billion in Bitcoin will boost the institutional investment space, which has been dominated by Grayscale for so long.
To compete with the giant Grayscale, BlockFi has created a more competitive pricing policy for its largest Bitcoin Trust. In comparison to Grayscale’s annual fee of 2%, BlockFi Bitcoin Trust is going to charge a 1.75% annual fund management fee. This is a 25% fee rebate from BlockFi against Grayscale’s fee structure. This is expected to provide the institutional investors a huge relief, considering the large amounts of investment they make.
A flexible value fund named the Miller Opportunity Trust (weighing $ 2.25 billion) has recently announced its plan of investing up to 15% of its funds in the Grayscale Bitcoin Trust. With the entry to BlockFi Bitcoin Trust, the institutional investors will get a more profitable alternative entry point into the crypto market compared to the existing one.
Similar to BlockFi, another cryptocurrency asset manager Bitwise Asset Management has also filed an application with the United States Financial Authority (FINRA) for launching its own Bitwise Bitcoin Fund. In the coming days, another trust fund called Osprey Bitcoin Trust is also expected to appear.