Barry Silbert, CEO of SecondMarket, tweeted yesterday that he’s “Excited to share some
@BitcoinTrust news tomorrow…”. Today, they revealed that they will be opening up their Bitcoin Investment Trust (BIT) even to non-accredited investors through listing its shares on an electronic marketplace operated by OTC Markets Group Inc.
Until now, the fund had only been accessible to accredited investors worth more than $1 million, bringing in an annual income of at least $200,000 and investing a minimum of $25,000. On its website dedicated to the fund, BIT is described as follows:
“The Bitcoin Investment Trust (BIT) is a private, open-ended trust that is invested exclusively in bitcoin and derives its value solely from the price of bitcoin. It enables investors to gain exposure to the price movement of bitcoin without the challenges of buying, storing, and safekeeping bitcoins.”
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SecondMarket is an online marketplace which helps investors trade illiquid assets such as private company stock, bankruptcy claims and restricted shares in public companies. In the case of Bitcoin, the underlying asset can be fairly easily purchased on several online exchanges. However, investors who are averse to putting large amounts of capital at risk in a completely unregulated, unprotected environment will find this route more palatable.
They’re registered as an alternative trading system (ATS) for trading in company shares with the SEC. In terms of BIT though, they note that:
“The BIT is a private, unregistered investment vehicle and NOT subject to the same regulatory requirements as exchange traded funds or mutual funds, including the requirement to provide certain periodic and standardized pricing and valuation information to investors. There are substantial risks in investing in the BIT.”
The offering is subject to FINRA’s and OTC Market’s approval. If granted, the fund can open up as soon as Q4 2014. They plan on making SEC-compliant disclosures but will be exempt from SEC’s rigorous pre-approval processes by doing so outside of any regulated exchange. In any event, their drive for such a level of oversight will likely allow them to remove or significantly alter the above disclaimer.
SecondMarket is not alone in trying to bring Bitcoin to public trading. Earlier, we reported on Pantera’s launch of a $147-million Pantera Bitcoin Advisors fund, as well as Winklevoss Investment Trust’s registration with SEC.