We’re excited to announce the launch of the all-new BlockFi Bitcoin Trust
, an investment vehicle that makes it easier for institutions and individual investors to access bitcoin. The trust is designed to provide an alternative and more cost-effective entry point into the crypto market.
Why did we choose to create a trust? Well, investment trusts are among the most popular methods for major institutions to invest in bitcoin, and ours is built to make the process simple and transparent.
Here’s how it works. The BlockFi Bitcoin Trust will issue shares through private placements, and the value of the shares will reflect the value of BTC held by the trust (minus expenses and other liabilities). Initially, trust shares will be made available to global institutions and other qualified investors. Later on, access will be expanded to include accredited individual investors in the US.
“Given the level of institutional activity in recent months and demand for new, professional-grade investment vehicles, the timing of BlockFi Bitcoin Trust is ideal,” said Zac Prince, founder and CEO of BlockFi. “As we work to broaden the availability of this vehicle to retail brokerages, we expect this product will facilitate greater investments in digital assets.”
The first round of subscribers to the trust will include BlockFi, of course, as well as a select group of institutions, all using BTC to subscribe. Once the initial lockup period ends, shares may become available for secondary investment on a wide range of recognized brokerage platforms.
As sponsor of the trust, BlockFi Management LLC, a wholly owned subsidiary of BlockFi, will charge a sponsor fee of 1.75%. Bitcoin held in the trust will be custodied by Fidelity Digital Assets Services through an enterprise-grade custody solution that’s purpose-built for institutional investments. Davis Polk & Wardwell serves as legal counsel to BlockFi in connection with the trust, while Coin Metrics Inc. is providing index and pricing data, and Grant Thornton LLP is serving as the trust’s financial statement auditor.
"We believe a trust structure for this product is beneficial for investors and will play an important role in improving access in this nascent market," added Yevgeniy Feldman, Vice President for Institutional Services at BlockFi. "The BlockFi Bitcoin Trust can more easily meet rapidly growing demands from the public to invest in digital assets, and our decision to custody the Trust's holdings with Fidelity Digital Assets will help give shareholders peace-of-mind in the security of their investments."
“The digital asset ecosystem has grown significantly in recent years, creating an even more robust marketplace for investors and accelerating demand among institutions,” said Christine Sandler, head of sales and marketing for Fidelity Digital Assets. “An increasingly wide range of investors seeking access to bitcoin has emphasized the need for a more diversified set of products offering exposure to the asset. Like BlockFi, we believe pairing innovative products with institutional-grade solutions that provide high-caliber security will help enable broader adoption of digital assets.”
Disclaimer: Investors should carefully consider the investment objectives and risks as well as fees and expenses of the Trust before investing. More information can be found in the Trust’s Private Placement Memorandum. Read the Private Placement Memorandum carefully before investing.
Nothing contained in this announcement should be construed as a solicitation of an offer to buy or offer, or recommendation, to acquire or dispose of any security, commodity, investment or to engage in any other transaction. The information provided in this announcement is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. This announcement is not directed to any person in any jurisdiction where the publication or availability of the announcement is prohibited, by reason of that person's nationality, residence or otherwise.
Investments in the Trust involve risk and the value of the Trust’s shares could go down.
Neither BlockFi nor any of its affiliates or representatives provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.