- The investment firm Wilshire Phoenix has filed a document with the Securities and Exchange Commission (SEC) for approval of a Bitcoin-based trust.
- Wilshire Phoenix proposes a custodian fee of 0.9% which is compared to Grayscale’s significant lower.
The investment firm Wilshire Phoenix has filed a document with the Securities and Exchange Commission seeking approval for a Bitcoin-based trust. The document is an S-1 registration statement and contains details of the Bitcoin Commodity Trust that Wilshire Phoenix intends to publicly launch.
According to the document, the trust will offer an unspecified amount to BTC in the form of shares to be sold in an IPO (Initial Public Offering). In addition, Wilshire Phoenix clarified that the trust will be fully backed by BTC and will have the following objectives
(…) provide investors with exposure to Bitcoin in a manner that is accessible and cost-efficient without the uncertain and often complex requirements relating to acquiring or holding bitcoin.
The investment firm will endeavour to ensure that the shares are admitted for trading on the OTCQX Best Marketplace of the OTC Markets Groups, Inc. Once issued, the shares may be sold and purchased in the market as any other publicly traded security. The ticker symbol has not yet been specified, however, the document clarifies the following:
The investment objective of the Trust is for the Shares to reflect the value of bitcoin held by the Trust, as determined by reference to the Chicago Mercantile Exchange Bitcoin Reference Rate (the “CME CF BRR” or “Bitcoin Reference Rate”), less the Trust’s expenses and other liabilities.
The document adds that the total asset value is calculated at the above rate, the CME’s Bitcoin reference rate. This rate is used by the futures contracts offered on the CME and, as stated in the document, is a valid reference for calculating the settlement rate for financial derivatives based on the Bitcoin price.
Increased institutional interest in Bitcoin (BTC)
The fund proposed by Wilshire will be similar to the fund offered by Grayscale through its Bitcoin Trust. Grayscale has increased its share of the crypto market and has purchased large volumes of BTC and Ethereum (ETH) in recent months. Apparently there is an increase in institutional interest, with companies increasingly offering BTC-based products that are tailored to make them an attractive option for institutions.
Therefore, the Wilshire fund will offer a custodian fee that is 50% less than that offered by Grayscale. The investment firm has an annual fee of 2%, but the Wilshire fund proposes a lower fee of only 0.9%, according to the document:
Except for transaction costs associated with the purchase and sale of bitcoin, the Trust’s primary recurring expense is expected to be the Sponsor’s fee which will be determined by applying an annual rate of 90 basis points (0.90%) to the Trust’s NAV (the “Sponsor’s Fee”).
Wilshire Phoenix will use the services of Fidelity Digital Assets as custodian of Bitcoin on behalf of the fund. Money in fiat currency (USD) will be held by UMB Bank on behalf of the Fund, as stated in the document:
The Trust’s bitcoin and U.S. dollars are carried, for financial statement purposes, at fair value, as required by the U.S. generally accepted accounting principles (“GAAP”).