First Block Capital announced that it has been granted registration as an investment fund manager in British Columbia and Ontario, making it the first registered investment fund manager in Canada dedicated solely to cryptocurrency investments. Their fund, FBC Bitcoin Trust (FBT), invests exclusively in Bitcoin. This allows Canadians to place their Bitcoin investments tax-free into their version of 401ks and IRAs, Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP).
It’s inevitable that all the adults in the room want Bitcoin to go to college and get a degree in finance, a cypherpunk getting his MBA from HBS. What does that look like? Bitcoin should be the name of a type of wild mustang horse, a bucking bronco. By its very nature, it was designed to be disruptive, to knock over tables, to throw a TV into a hotel pool!
It’s supposed to blow up the world and invert the all-seeing eye pyramid to that the everyone became as empowered at the 1%, at least when it came to access to freely-transportable, liquid, equity.
Well, there’s only so much change you can make throwing pavement stones rioting in the streets. Bitcoin might need to sacrifice a little in order to build the trust it needs to actually have access to the bridge instead of being stuck in the engine room. Bitcoin is pretty handsome in a blue blazer with gold buttons, it turns out.
FBT will allow qualified investors to obtain exposure to bitcoin in an efficient manner without having to acquire, store or manage the underlying bitcoins. Xapo GmbH of Zurich, Switzerland (“Xapo”) is the custodian of FBT’s bitcoin investments. Xapo is viewed as a leader in bitcoin security and will oversee the retention, security, and transfer of bitcoins for FBT. Xapo is also principally responsible for the execution of transactions in bitcoin for FBT.
The way FBT works is that all your Bitcoins belong to us. And by “us” I mean “Xapo GmbH of Zurich, Switzerland,” the third party custodian. Which is cool because you’ll be able to honestly say that all your wealth is in a Swiss bank.
So, FBT works by proxy, like an index fund. On the upside, Xapo is definitely better at securing a crypto wallet than you are. Downside, you don’t really own, own that Bitcoin in the same way you would if you were HODLing it in your own digital or analog wallet in the same way that owning SPDR Gold Shares (GLD) in a Gold Mutual Fund isn’t the same as squirreling away bullion gold coins under floorboards in your house.
I can’t tell you accurately how many bitcoins I’ve mined and lost, misplaced, or lost private keys and passwords for since 2009. If I thought about it I would cry. Okay, I was in a corner, in the fetal position, rolled into a ball, in the dark, and crying in huge jags when Bitcoin was approaching $19,783.06 last December.
Investing in crypto is popularly perceived as volatile, exciting, and dangerous. It’s often fancied a novelty and not a real investment vehicle. Getting the stamp of approval from the Canadian government is a real step towards graduation day. Maybe Bitcoin will graduate with an MBA from the University of Toronto’s number-one Rotman business school instead of Harvard, after all.Leave a comment