Bitcoin ETF Gears Up for IPO

Chris Lange

Bitcoin Investment Trust has filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). No pricing details were given in the filing, but the offering is valued up to $500 million. It intends to list its shares on the NYSE Arca under the symbol GBTC.

No underwriters were mentioned in this filing.

The investment objective of this trust is for the shares to reflect the performance of the value of a bitcoin as represented by its exchange rate with the U.S. dollar. The shares are designed to provide investors with a cost-effective and convenient way to invest in bitcoins. Because the value of the shares is tied to the value of the bitcoins held by the trust, it is important to first understand the investment attributes of, and the market for, bitcoins. Investing in the shares does not insulate the investor from certain risks, including price volatility.

Bitcoins are a digital commodity based on an open source protocol. Bitcoins are not issued by any government, bank or central organization, and instead exist on an online, peer-to-peer computer network that hosts a public transaction ledger where bitcoin transfers are recorded. The Bitcoin Network is accessed through software, and software governs bitcoin creation, movement and ownership.

Bitcoins have no physical existence beyond the record of transactions on the Blockchain. The Blockchain is a public record of the creation, custody and flow of funds of bitcoins, showing every transaction effected on the Blockchain among users’ online “digital wallets,” where their bitcoins are effectively stored. Bitcoins may be sent or received through users’ digital wallets by using public and private keys that are part of the Bitcoin Network’s cryptographic security mechanism.

Ultimately, the trust will not receive any proceeds from the sale of shares by the selling shareholders.