Toronto-based investment manager 3iQ Corp. has completed a $48 million offering in its Bitcoin Fund (QBTC.U), trading on the Toronto Stock Exchange. Just don’t tell Americans.
A statement released today detailing the investment opportunity makes it very clear in bold letters at the top: NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. In spite of being traded on the Canadian exchange, the value of the investment is denominated in U.S. dollars.
While not technically the widely anticipated bitcoin exchange traded fund (ETF) that many institutional investors have been waiting for, this is a closed end fund better described as an exchange traded product. The price of bitcoin increased 5% over the past 24-hours, crossing $10,000 last night, and was trading at $9,995 at the time of publication, according to OnChainFX.com.
The investment, co-led by Canaccord Genuity Corp. and Echelon Wealth Partners Inc., also including Leede Jones Gable Inc., Mackie Research Capital Corporation and PI Financial Corp. is not allowed to be marketed to U.S. investors as the U.S. Securities and Exchange Commission has been reluctant to approve similar products for U.S. investors.
A disclosure at the bottom of the statement reads: “This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act.” Sorry Americans.
While 3iQ’s Bitcoin Fund product isn’t registered to serve U.S. investors a number of U.S. firms were involved in its creation, including New York-based ARK Invest, Van Eck and Doyle Capital. Both VanEck and Jack Tatar of Doyle Capital Management have confirmed they were also investors. The fund uses the MVIS index developed by VanEck.
“My goal and my involvement in this product has been to get an easy to invest product to investors looking to get exposure to bitcoin,” says Tatar.
Founded in 2012 to help build institutional grade investment products for cryptocurrencies, 3iQ Corp. acted as the manager and portfolio manager of the Fund.
The previously announced offering closed yesterday at a price of U.S. $11.87 per Class A unit and U.S. $11.63 per Class F unit for total gross proceeds of approximately US$48 million.
The Fund’s investment objectives are to provide investors who might not otherwise be permitted to hold bitcoin to gain exposure to the daily price movements of the asset and the opportunity for long-term capital appreciation.
The completion of the fund marks a milestone for Canadian institutional and accredited investors, while the U.S. Securities and Exchange Commission has shot down multiple applications for similar products, including from Tyler and Cameron Winklevoss, Bitwise and more recently Wilshire Phoenix.
Those who participated have the option to purchase up to an additional 15% of the Class A units issued on the closing date of the Offering, for 30 days from today.
Disclosure: Fund investor Jack Tatar is the author of the Forbes CryptoAsset & Blockchain Advisor