This evening, SecondMarket, took a further step into the Bitcoin space through announcing its new work with the Bitcoin Investment Trust (BIT), a private investment vehicle. The BIT is the first U.S.-based private investment vehicle to invest in bitcoin alone and received a $2 million seed investment from SecondMarket. Moving forward, shares of the BIT will be exclusively offered through SecondMarket. SecondMarket and BIT pushed out the following press release this evening:
Bitcoin Investment Trust Launches on SecondMarket
First U.S.-based private investment vehicle to invest exclusively in bitcoin begins raising capital
NEW YORK, Sept. 26, 2013 – The Bitcoin Investment Trust (BIT), a private investment vehicle, announced today that it has begun raising capital on SecondMarket. The BIT is an open-ended, private trust that is exclusively invested in bitcoin and derives its value solely from the price of bitcoin. It enables institutional and accredited individual investors to gain exposure to bitcoin without the buying, storing and safekeeping challenges of direct bitcoin ownership. The BIT is the first U.S.-based private investment vehicle to invest exclusively in bitcoin.
The BIT’s sponsor is Alternative Currency Asset Management (ACAM), a wholly-owned subsidiary of SecondMarket. Shares of the BIT are being exclusively offered through SecondMarket, a registered broker-dealer. SecondMarket has also made a $2 million seed investment in the BIT.
“We incubated the BIT to alleviate the problems of direct bitcoin ownership, including having to wire money to newly-established and potentially unregulated entities around the world,” said SecondMarket Founder and CEO Barry Silbert. “SecondMarket has a track record of making alternative investments accessible to a broader group of qualified investors, and our infrastructure enables streamlined capital raising, liquidity, and investor communications for funds and companies. Thus, we believe that a bitcoin-related investment vehicle is a great fit for SecondMarket.”
Bitcoin is a digital currency and global transaction network that was created to eliminate the challenges of using analog currency and payment mechanisms in a digital world. Since its inception in 2009, the market capitalization of bitcoin has risen to $1.5 billion, 24 million bitcoin transactions have been conducted, and more than 10,000 vendors now accept bitcoin. Proponents believe that bitcoin has potential as a store of value, global currency and/or global transaction network, and could disrupt the incumbents in e-commerce, remittance and other related industries. Only a finite number of bitcoins can ever be created; accordingly, bitcoin may not suffer the inflationary impact of fiat currencies.
“We believe that bitcoin may have significant upside given the size and scope of the industries that potentially are impacted by bitcoin,” Silbert noted. “However, bitcoin also faces regulatory uncertainty and widespread adoption issues that make investing in bitcoin a highly risky endeavor.”
As sponsor, ACAM has retained prominent service providers including Sidley Austin LLP (legal counsel), Ernst & Young (auditor), Continental Stock Transfer & Trust (transfer agent) and SecondMarket (marketplace, custodian and authorized participant). Investors who purchase shares in the BIT will have the opportunity to gain liquidity through periodic auctions on SecondMarket beginning in 2014. The Net Asset Value (NAV) of the BIT will be calculated daily and made publicly available.
For more information, visit bitcointrust.co.
Alternative Currency Asset Management (ACAM), a wholly-owned subsidiary of SecondMarket, is an asset manager focused on alternative currencies, including bitcoin. ACAM is the sponsor of the Bitcoin Investment Trust.
SecondMarket enable private companies, investment funds and other issuers to manage liquidity, raise capital and communicate with their stakeholders. SecondMarket is backed by premier investors, including FirstMark Capital, The Social+Capital Partnership, Li Ka-shing Foundation, Temasek Holdings, New Enterprise Associates (NEA) and Silicon Valley Bank. SecondMarket is a registered broker-dealer and member of FINRA, MSRB and SIPC and a registered alternative trading system (ATS) for private company stock. For more information, please visit secondmarket.com.
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