Sophisticated investors will be able to gain exposure to bitcoin through a new fund that’s been set up by DigitalX (ASX: DCC) to attract family offices and high net worth individuals.
In order to establish and launch the Bitcoin Fund, DigitalX will seed it with 215 of its bitcoin, effectively swapping its interest in those bitcoin for an equivalent interest in the fund.
DigitalX estimates its approximate investment into the fund will be about $2.75 million.
This is based on a price per bitcoin of $12,800.
“DigitalX has held its bitcoin position through the 2017 bull market and 2018 drawdown because of our fundamental long-term belief in the value of the asset,” DigitalX executive director Leigh Travers said.
The company has been involved in the bitcoin ecosystem since 2014 when it first commenced its bitcoin mining operations.
“What has become more and more apparent to us as we speak to investors and market participants, generally, is that there is a growing interest in accessing bitcoin from people who have traditionally not considered investment in digital assets,” said Mr Travers.
The Australian wholesale unit trust structure will utilise institutional grade custody and the bitcoin holdings will be secured in the highest-grade wallet security system available through provider ‘BitGo’.
BitGo as a bitcoin custodian is insured up to US$100 million.
DigitalX also intends to offer blockchain-based security for the registration and transfer of units in the unit trust, marking a significant development in the security and registration of the interests in the und and in unit trusts generally.
The wholesale fund is licenced and administered by Boutique Capital Pty Ltd and will be open to qualifying investors in accordance with the regulatory requirements.
“Investing in bitcoin through the Bitcoin Fund will enable investors to gain an exposure and interest in bitcoin without needing to navigate some of the challenges that may confront inexperienced investors in digital assets,” Mr Travers explained.