Nick Chong · 1 week ago · 2 min read · Insights via Grayscale Investments
Neo › Canada › Adoption
Canada’s First Bitcoin Fund Debuts on NEO Connect, Opens to Accredited Investors
The notion of a Bitcoin ETF may have become retail investors’ lifeline, fixing the spotlight firmly on every move of the ubiquitous financiers of Wall Street. Meanwhile, just north of the border, Canadians are witnessing the launch of the nation’s first Bitcoin fund, an ETF-style onramp for the country’s largest investors.
A product of Canada’s first, fully regulated cryptocurrency investment firm First Block Capital, FBC Bitcoin Trust has broken ground as the only open-ended Bitcoin fund approved by Canadian regulators and will allow accredited investors to hold Bitcoin investments in registered accounts including retirement savings plans and tax-free savings accounts, according to an official press release.
"As the market leader in providing investment vehicles based on #blockchain and #cryptocurrency in Canada, we are very happy to make our fund more accessible to the accredited investor community” Sean Clark, co-founder + CEO, @1stBlockCapital @IE_Canada https://t.co/LCWCdcB9u2
— NEO Exchange (@Aequitas_NEO) September 10, 2018
As Good as an ETF?
The trust, which allows high-net-worth individuals to invest “seamlessly” in Bitcoin through their investment advisors, will be traded on asset management platform NEO Connect and will purportedly permit asset managers to execute moves with the “same ease and efficiency” as an ETF.
Where the newfangled fund would test the appetites of investors, First Block Capital Co-Founder and CEO Sean Clark seems to see the Bitcoin Trust as hitting the ground running.
Clark explained that the FBC Bitcoin Trust comes as a response to the needs of both investors and their advisors, speaking to Canadian newspaper The Globe and Mail:
“The longer redemption time frame was a feature that we felt really hurt the fund and the reason why we didn’t reach hundreds of millions [in assets] coming out of the gate. … Investors wanted more liquidity in this sector and we are pleased to now be able to offer advisers daily trading capabilities for those discretionary accounts.”
Claiming to service more than $600 million in total assets, NEO Connect would presumably fit such a bill.
As Canada’s first and only fund distribution platform for ETF-style prospectus and private offering memorandum funds, the company has pushed regulatory boundaries in what it describes as “an ever-expanding spectrum of new and innovative asset classes” and would presumably draw out a healthy client base from the the 46 funds it distributes.
First Block: Still Bullish
With approximately $20 million in assets under management, First Block’s new fund would have more skin in the game than most. And yet, in the face of sub-$200 billion market capitalization, CEO Sean Clark appears to see the current state of play as a much-need correction.
“The price spike in December was from a lot of speculation and the market getting ahead of itself. Now that it has settled down, now is the time to enter the market.”
Perhaps a further initiative for perturbed investors still feeling the aftershocks of Goldman Sachs’ Bitcoin trading desk postponement—Clark maintains the banking giant has merely switched “their focus” and remains “bullish on Bitcoin.”