KATWIJK, NETHERLANDS – JULY 7: In this photo illustration, visual representations of the digital … [+]
Grayscale announced yesterday that shares of their digital asset funds, Bitcoin Cash Trust and Litecoin Trust, have FINRA approval for public quotation under BCHG and LTCN. They will be the first digital asset-based funds to be publicly quoted in the U.S. market.
These funds will be open-ended trusts sponsored by Grayscale and are intended to enable exposure to the price movement of the trusts’ underlying assets through a traditional investment vehicle. The idea is to provide an accredited investor the opportunity to invest in digital assets while avoiding buying, storing, and safekeeping digital Bitcoin or Litecoin directly.
The trusts are not yet DTC eligible. Grayscale said in its press releases, “There will be no trading volume in the Shares’ public quotations until the respective Shares are DTC eligible, which BCHG and LTCN are expected to receive soon.” The company continued, “The Trusts are not registered with the Securities and Exchange Commission and are not subject to disclosure and certain other requirements mandated by U.S. securities laws.”
Cryptocurrency exchanges, in general, are not yet fully regulated by FINRA and the SEC. The result has been limited adoption by large institutional investors and hedge funds.
But Grayscale’s achievement by moving in that direction signals that regulatory barriers can be resolved. Digital assets may become more commonplace in funds seeking alpha value opportunities and diversification.