Bitcoin fund managers are the new cool kids on the block, evidenced by the surge of off-shore and on-shore investment vehicles that are launching nearly every week. Make no mistake about it Matilda, this is not a symptom of madness or a short-term mania, it is a reflection of the classic first inning excitement that is typical to innovative technologies that are on the cusp of transforming a full spectrum of industries, if not life as we know it. For the less-informed, the nearly delirious activity taking place in both unregulated platforms and ‘semi-regulated’ (e.g. futures markets) that specialize in bitcoin and cryptocurrency markets is masking the critical and underlying component of these ‘alt currencies’; “Its not about the coin(s), stupid! Its all about blockchain technology!”
Bitcoin Fund Managers Bolster New Asset Class: Offering Document services see strong demand for prospectus preparation services
In a WSJ Jan 8 2018 article “Currency Craze: What Now for Bitcoin Funds?”, reporter Rob Curran frames the first inning action by profiling the good, bad and ugly angles of the assortment of private investment funds and proposed tracking funds that are wrapped in ETF-like structures.
“There has been a blizzard of cryptocurrency hedge-fund launches. The Securities and Exchange Commission has a pile of bitcoin ETF applications. And like children outside a Fingerlings store, institutional investors are lining up to get into the funds….The largest is Bitcoin Investment Trust , a de facto exchange-traded fund managed by Grayscale Investments, a unit of Barry Silbert’s Digital Currency Group. The fund, which has traded over the counter since 2015, is the only bitcoin investment that people can make in most retirement or brokerage accounts. The ravenous demand of investors for anything bitcoin-related has resulted in the OTC shares trading at a hefty premium to the fund’s bitcoin holdings. The premium, which has sometimes meant that shares of the fund cost double the price of bitcoin, is what led short seller Andrew Left to bet against the price of the fund.
But as Mr. Silbert sees it: “The premium is just evidence that there is a tremendous institutional and retail demand for access to products that enable investors to buy bitcoin.”
Silbert’s statement could be viewed as prophetic. And make no mistake about, Barry Silbert is no neophyte; his pedigree within the world of fintech is well-documented and he’s proven to be prescient more than several times throughout the past 10 years as evidenced by his founding of SecondMarket in 2008 and its subsequent acquisition by NASDAQ a mere 7 years later.
“The number of inquiries and requests from finance industry professionals for us to prepare compliant investor offering documents for crypto-centric funds is certainly keeping us busy”, said Paul Azous, CEO of Prospectus.com. “We don’t see this as some type of anomaly that is connected to a short-term fad, many of the funds we are working with are forward-thinking folks who realize that blockchain applications will be expressed in nearly every business process.”
In addition to preparing investment fund offering documents, Prospectus.com helps blockchain-based startups craft white papers, presentation decks that resonate with accredited investors and through a captive network of crypto industry consultants, the firm guides those advancing Initial Coin Offerings (ICOs).
Bitcoin Fund Managers Bolster New Asset Class