Bitcoin Trust's Silbert to Launch Classic Ether Fund This MonthBy
New vehicle seen eventually trading over the counter
Classic ether trust to be modeled after bitcoin version
Barry Silbert, whose Bitcoin Investment Trust made it easier for mainstream investors to bet on bitcoin’s value, is looking to create a second trust later this month focused on a different digital currency: classic ether.
The new trust will buy up and hold classic ether, which can be a hassle to obtain independently. The new financial vehicle will be structured exactly like the Bitcoin Investment Trust, run privately and available to accredited investors, such as those those with a net worth of more than $1 million or with $200,000 in annual income. It will also have minimum investment requirements, which are yet to be disclosed.
Eventually, just like Bitcoin Investment Trust, it may start trading over the counter, Silbert said in an interview. The bitcoin trust, started in 2013, is currently waiting for approval to list on the NYSE Arca market.
By increasing demand for classic ether, the trust could boost the price of the digital currency, which is less than a year old. Classic ether, in which Silbert and his Digital Currency Group are investors, currently has a market value of about $116 million, having appreciated 44 percent since July, according to CoinMarketCap.com.
Prices for bitcoin and other digital currencies have been surging, partly on a bet that their value will be increased by attempts to make them more widely available for trading. Bitcoin hit a record last week, though it has fallen in the past few days, dropping 6.4 percent Wednesday to $1,165.19.
Classic ether is a far less well known currency that bitcoin, which has a market value of $18.7 billion, according to CoinMarketCap.com. It was created after infighting among holders of ether, a separate currency that now has a market value of about $1.48 billion.
Classic ether’s development and rules governing the nets; recently, developers announced there will be no more than 230 million classic ether tokens issued -- a decision that makes the digital currency a scarce resource, just like bitcoin.
Sponsored by Grayscale Investments, which Silbert founded, the Bitcoin Investment Trust emerged when bitcoin cost around $100, a far cry from its current price. The trust now has about $220 million in assets under management.
“I think we’ve demonstrated success,” Silbert said. “And I think we demonstrated our ability to identify an investment opportunity before it attracted a lot of attention and a lot of capital.” Grayscale will publish a thesis for the new trust on Thursday.
In the future, Grayscale Investments may introduce other products focused on additional digital currencies, Silbert said. One other digital currency he holds is Zcash, he said.
— With assistance by Rob Golum