The cryptocurrency financial services firm Blockfi has launched a bitcoin-based trust that offers custody from Fidelity Digital Asset Services. Blockfiâ€™s investment vehicle aims to give investors exposure to the leading crypto asset as bitcoin assets under management (AUM) was over $29 million on February 8, 2021.
Blockfi Launches a Competitive Bitcoin Trust With a Sponsor Fee of 1.75%
On Tuesday, the lender and financial services company Blockfi launched its trust as it is managed by Blockfi Management LLC, a wholly-owned subsidiary of Blockfi.
The trust will charge a sponsor fee of 1.75% and the company leverages custodial services from Fidelityâ€™s crypto arm. According to the announcement, the company will use Coin Metricsâ€™ index services and pricing data. The company Grant Thornton LLP will be the Blockfi Bitcoin Trustâ€™s financial auditor.
Blockfiâ€™s trust will compete with Grayscaleâ€™s Bitcoin Trust (GBTC) and it offers an annual fee that is .25% lower than GBTCâ€™s fee rating. There are approximately 685,500 shares outstanding and each share represents 43.64 BTC according to Feb. 8 2021 data.
â€œGiven the level of institutional activity in recent months and demand for new, professional-grade investment vehicles, the timing of Blockfi Bitcoin Trust is ideal,â€ Zac Prince, the founder and CEO of Blockfi said during the announcement.
Fidelity Digital Assets Sees the Need for a More Diversified Set of Products Offering Exposure to the Asset
The recent Blockfi news follows the companyâ€™s Visa credit card launch that offers BTC rewards. Furthermore, a few days prior in December 2020, Blockfi launched a cryptocurrency trading platform. As far as Blockfiâ€™s trust is concerned, Fidelity Digital Assets looks forward to its partnership with the crypto financial services firm.
â€œThe digital asset ecosystem has grown significantly in recent years, creating an even more robust marketplace for investors and accelerating demand among institutions,â€ the head of sales and marketing for Fidelity Digital Assets, Christine Sandler said.
Blockfi is not the only competitor trying to compete with Grayscaleâ€™s bitcoin trust product, as the crypto asset manager Bitwise recently filed to publicly trade its bitcoin fund. On February 2, 2021, Bitwise Asset Management, announced it had filed a Form 211 with the U.S. Financial Industry Regulatory Authority (FINRA) for the Bitwise Bitcoin Fund (BBF).
What do you think about Blockfi launching a bitcoin trust? Let us know what you think about this subject in the comments section below.
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