SecondMarket, an upstart stock exchange, which is widely known for providing investors with private shares of hot companies such as Twitter, is turning its attention to bitcoin. SecondMarket is expected to begin raising money on Thursday for a first of its kind investment fund that will hold only bitcoins. The fund will give wealthy investors exposure to the virtual currency. The Bitcoin Investment Trust, as SecondMarket named it, will provide investors any easy way to invest in the future of the bitcoin, which is currently traded on unregulated, online overseas exchanges.
“If you speak with people who have tried to purchase bitcoin in the past — you’ll hear, ‘it’s a difficult process,’ ‘it’s a confusing process,’ ‘it’s a scary process,’ ” said chief executive of New York based SecondMarket, Barry Silbert. “We want to make it an accessible asset class.” The venture is the latest attempt to bring the virtual currency into the mainstream.
Just a few months ago, Cameron and Tyler Winklevoss announced a similar product that will be an ETF or exchange traded fund. The two technology investors are known for their involvement with Facebook. As an ETF, the vehicle will be accessible to all investors, large and small, but is subject to an uncertain and lengthy review process with federal regulators.
Conversely, Bitcoin Investment Trust can begin raising money immediately but will only be available to investors who meet a wealth threshold of at least $1 million or annual income of more than $200,000 in each of the previous two years. The threshold is set by the Securities and Exchange Commission to insure only sophisticated shareholders invest in the fund. “It’s premature for this kind of product to be in the public market,” said Silbert. “It should not be available to unsophisticated investors.”
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