2021-02-24 BlockFi Launching its Bitcoin Trust Fund to compete with Grayscale

[blacky90]

BlockFi (a renowned cryptocurrency saving and lending company) has announced launching its bitcoin fund, called the BlockFi Bitcoin Trust. It is meant for institutional investors. This new Bitcoin Trust of BlockFi will take on Grayscale and offer services at more competitive prices. BlockFi is a renowned name in the crypto world. It helps you buy and earn interest on your cryptocurrency. This company also enables you to borrow money without selling your assets.

The announcement says that the BlockFi Management LLC will use Coin Metrics’ pricing data and indexing services. A reputable accounting firm, Grant Thornton, will audit the financial statements. Grant Thornton is well known for providing services to Coinbase, a reputed American exchange. A BlockFi partner, Fidelity, will reportedly provide custody services in this new endeavor.

https://medium.com/daily-highlights-crypto-analysis-news/blockfi-launching-its-bitcoin-trust-fund-to-compete-with-grayscale-dbd9822d3f97

[Karartma1]

I saw the news already some time ago. What matters here IMHO is that this new Trust will charge investors a fee of 1.75%, and the firm will use custodial services from Fidelity’s crypto arm.
Is this enough to compete with GBTC, the biggest bitcoin conglomerate we have ever witnessed so far? The price isn't that cheap either. We'll see how it goes.

[zanezane]

Good luck being on par with Grayscale, they are veteran in the game and I think that BlockFi will be filling in a very big shoe if they want to compete with Grayscale. I hope that along the way, they make their services available to individual investors if they want to get ahead than their competition.

[cr1776]

Any fee break from GBTC is a positive, but it isn't enough (most likely) to get people to switch given that capital gains taxes would be due on the sale.  New money would go there and one hopes that the competition would encourage GBTC to match the price.  Competition is good for everyone.

[DapanasFruit]

This is a good manifestation of the continuing trust and confidence slapped on Bitcoin by the people of BlockFi and their future clients. In the case this Bitcoin fund can be getting a good number of investors that can be a signal that the bullish state can certainly go on in 2021. I am sure that BlockFi is aware of the leadership position enjoyed by Grayscale, so maybe they got some good strategies at hand to get even a small fraction of the available market. So goodluck to BlockFi.

[Karartma1]

Any fee break from GBTC is a positive, but it isn't enough (most likely) to get people to switch given that capital gains taxes would be due on the sale.  New money would go there and one hopes that the competition would encourage GBTC to match the price.  Competition is good for everyone.

If I recall it correctly it's a mere 0.15% less! One would argue that on big numbers even a tiny 0.15% variation can make a difference but still it is quite high.
GBTC is not like an exchange where I go in and out with ease and I don't see this as an incentive to leave the GBTC boat to go on another fund. We'll see how this plays out.

[cr1776]

Any fee break from GBTC is a positive, but it isn't enough (most likely) to get people to switch given that capital gains taxes would be due on the sale.  New money would go there and one hopes that the competition would encourage GBTC to match the price.  Competition is good for everyone.

If I recall it correctly it's a mere 0.15% less! One would argue that on big numbers even a tiny 0.15% variation can make a difference but still it is quite high.
GBTC is not like an exchange where I go in and out with ease and I don't see this as an incentive to leave the GBTC boat to go on another fund. We'll see how this plays out.

Agreed, it will be interesting to see how this plays out.  For big numbers and/or over long time periods of compounding, 0.15% becomes significant. 

[acquafredda]

Yes and maybe the most important thing, apart from the very small fee difference, is that such different investment vehicles are getting established. The more the better as it means that there is a lot of market demand, and some serious customer recognition. This Trust fund would not be the last we see.

[aoluain]

Definitely the demand for bitcoin will increase with more investment instruments which are created
to attract people from FIAT and Gold.

It also means that the coins bought will be locked up for the long term and drives the price up making
 it harder for us poor minions to purchase.

Time is quickly running out to buy Bitcoin at an affordable price (assuming we think $50k is affordable)