BlockFi’s Bitcoin Trust Takes Aim at GBTC – CoinDesk


With a 1.75% management fee, the fund started taking subscriptions last Friday and the fund has nearly $30 million in assets under management, according to its website. Roughly six to 12 months from now, the trust should be available on over-the-counter markets making it tradable through brokerage accounts, Prince said. 

The fund’s assets are custodied by Fidelity Digital Asset Services, Davis Polk & Wardwell will act as BlockFi’s legal counsel in connection with the trust, Coin Metrics will provide index and pricing data, and Grant Thornton will serve as the fund’s auditor. BlockFi will be announcing a partnership with a broker-dealer before the shares are publicly traded.

Prince couldn’t say whether the shares would trade at a premium to the spot price of bitcoin as Grayscale’s trust does, but James Seyffart, ETF research analyst at Bloomberg Intelligence, said there is little reason to think it wouldn’t because typically there are not enough shares in funds to meet the demand. BlockFi could pull in a significant number of retail users that are already using the firm’s other bank-like products, Seyffart added. 

“If you’re on BlockFi they can pull in some of their clients that are using them for the high interest rate accounts, whether it’s on crypto or USDC,” James Seyffart, ETF research analyst at Bloomberg Intelligence, said.

“The firms that build the relationships, the distribution and asset management structures to have significant assets under management before an ETF is approved will be on the short list of firms that are really well-positioned to create or transition to an ETF when the regulators are ready for that,” Prince said.

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