Tax haven and British Crown island Jersey has approved a new regulated Bitcoin fund to be launched by Global Advisors on August 1. The fund will offer investors exposure to bitcoins, although according to the BBC, it will not be open to the general public. Based on GBP, it will initially target UK, European and Middle Eastern clients, followed by another fund targeting the US.
Being based in an offshore tax haven, the fund is said to be advantageous for tax purposes, although it technically doesn’t absolve tax obligations on foreign income.
Global Advisors is a commodity-focused hedge fund, co-founded by former JPMorgan trader Daniel Masters. Its general trading activities involve holding “concentrated positions in a narrow substrate of commodity markets.”
According to its site, the fund leverages its trading experience, mathematics and technology to mitigate risk and generate profits. As Bitcoin is at the crossroads of these disciplines, Masters found it appropriate for his next addition. Despite its highly volatile value, Masters maintains that Bitcoin is much like a commodity. Newsweek quotes him a saying:
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“The state of Bitcoin is a lot like the state of the oil market 25 years ago, where you had a lot of these transactions happening merchant to merchant, this product that everyone wanted and could use but whose prices were very, very volatile, very shaky.”
Masters is a Bitcoin bull, contrarian to many on Wall Street viewing it as a passing fad. He frequently uses Bitcoin for making everyday purchases.
Activists on Jersey have recently lobbied for it to become a Bitcoin paradise of sorts. Other tax havens like Isle of Man and St. Kitts are reportedly shaping up to become Bitcoin-friendly centers. In 2009, the fund relocated its London and New York offices to Jersey, “a move that furthers” their “team approach.”
In expanding to Bitcoin, Global Advisors enters a similar boat as Netagio. Netagio also brought the worlds of commodities and cryptocurrency together with its vault solutions for gold and Bitcoin, and most recently launched an exchange for the two.
The Jersey Financial Services Commission took one year to approve the fund. Masters maintains that it was still far easier than in New York or London because “in Jersey, you have one person playing sheriff instead of a dozen.”