Wilshire Phoenix filed for a publicly traded bitcoin trust

Wilshire Phoenix Funds filed a registration statement with the U.S. Securities and Exchange Commission on June 12, 2020 for a proposed investment trust designed to hold bitcoin and issue publicly traded shares.

The Bitcoin Commodity Trust represented a new route into the regulated securities market for the New York asset manager. On February 26, 2020, the SEC had rejected a separate NYSE Arca proposal involving Wilshire Phoenix’s United States Bitcoin and Treasury Investment Trust. That earlier product would have combined bitcoin with short-term U.S. Treasury securities; the new trust proposed holding bitcoin alone, apart from temporary cash required for purchases, sales, redemptions, fees and expenses.

The June 12 filing was preliminary. It did not mean the SEC had approved the offering, that investors could purchase shares, or that an active public market existed.

How the proposed trust would work

Each share would represent a fractional beneficial interest in the trust. Its investment objective was to reflect the value of the bitcoin it held, less expenses and other liabilities. The filing said net asset value would be calculated using the CME CF Bitcoin Reference Rate, a once-daily benchmark based on eligible BTC-USD spot transactions from several constituent exchanges during the hour preceding 4 p.m. London time.

Fidelity Digital Asset Services was named as the proposed bitcoin custodian. UMB Bank was assigned to hold the trust’s U.S. dollars, while UMB Fund Services would administer the vehicle and Broadridge Corporate Issuer Solutions would act as transfer agent and registrar.

The sponsor proposed an annual fee equal to 90 basis points, or 0.90%, of net asset value. Certain transaction, offering, regulatory and extraordinary expenses could remain additional charges to the trust. Because those costs would reduce its assets, the shares were not designed to reproduce bitcoin’s price without friction.

For purposes of calculating the SEC registration fee, the filing listed 80,000 shares at a proposed maximum price of $25 each, producing a maximum aggregate offering amount of $2 million. Those figures were registration-table assumptions, not proof that $2 million had been raised or that the final offering would use those terms. Several economically important fields elsewhere in the prospectus—including the final share count, ticker and minimum redemption size—remained blank.

Public trading still required more approvals

Wilshire Phoenix intended to seek quotation on OTC Markets Group’s OTCQX marketplace rather than list the shares on a national securities exchange. The prospectus explicitly said OTCQX quotation would first require Financial Industry Regulatory Authority approval and provided no assurance that approval, an active market or adequate liquidity would develop.

That distinction mattered after the February rejection. Filing a Securities Act registration statement for trust shares was procedurally different from obtaining SEC approval for an exchange rule change permitting a bitcoin exchange-traded product on NYSE Arca. The June proposal therefore showed continued institutional demand for a brokerage-accessible bitcoin vehicle, but it did not resolve the market-surveillance and manipulation concerns that the SEC had cited when rejecting the earlier exchange proposal.

The proposed redemption mechanism also differed from an assumption that every shareholder could immediately exchange shares for bitcoin. The filing contemplated cash redemptions on the last business day of a month, subject to advance written notice and a minimum size that had not yet been specified. The trust could sell bitcoin to fund those payments.

What June 12 established

The verified development on June 12, 2020 was the filing itself: Wilshire Phoenix formally presented the SEC with a bitcoin-only trust structure involving established custody, banking, benchmark and securities-administration providers.

Whether the registration statement would become effective, whether FINRA would permit an OTCQX quotation, what the final offering terms would be and whether investors would create a liquid market all remained unresolved. No bitcoin price movement can be attributed to the filing from the reviewed evidence, and this reconstruction makes no event-day return, volume or causation claim.