Tech: DigitalX is launching a bitcoin fund, promises less red tape and risk
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Crypto advisor DigitalX (ASX:DCC) is launching a less complicated bitcoin fund.
The company wants to grow its funds under management and utilise its bitcoin holdings. It will invest half of its bitcoin earnings into the fund — $2.75m based on a price per bitcoin of $12,800.
The fund will charge a management fee of 1.65 per cent annually but it won’t incur performance fees. It will only be available to wholesale and professional investors and it will not be listed.
The company told shareholders the fund would have less administrative burden and risk associated with acquiring bitcoin. Investors will be able to select and store bitcoin using a secure wallet procedure and trade quickly.
While each individual crypto exchange usually requires a formal sign up, this won’t be required, according to DigitalX.
DigitalX executive director Leigh Travers told Stockhead he expected to begin deploying capital in December following a roadshow later this month. He wants to emulate Grayscale’s bitcoin fund in the US.
“There has been investor caution in getting involved in the bitcoin space because of the rules,” he said.
“They don’t know how to custody, administer it in your super fund, how to account from a tax perspective.
“It’s a traditional investment structure with exposure to this new asset investors want to get involved in”.
DigitalX shares have had a rough few months due to declining revenues in conjunction with the falling crypto market. The company was also caught up in a lawsuit initiated by investors of an ICO last year, but settled the case in May.
Today, the stock rose 7 per cent at market open.
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