As most of you know I am a big believer in Bitcoin and I have been for years. I invested in Bitcoin, I invested in Bitcoin companies, I speak at Bitcoin and blockchain conferences, and I founded and run a blockchain company. One thing I realized over the years is that buying Bitcoin and keeping it safe is still a major hurdle for investors. Experienced “Bitcoiners” may think it’s easy, but if you have never bought coins and you need to transfer money to an exchange and then set up a wallet, it can be a daunting task. If you invest a significant amount of money you want to make sure the bitcoins are safe and you may worry about getting hacked. So many people asked me about how to buy Bitcoin that last year I decided to solve this problem.
The idea Tom Kineshanko and I came up with was to launch a trust that would issue units that represent part of a bitcoin. People can buy these units, so effectively they buy small parts of a Bitcoin without having to physically buy Bitcoin themselves and without having to worry about being hacked. It’s comparable to buying shares in a private company, although in this case the company is Bitcoin and the shares are relatively liquid.
In order to get this started we teamed up with super-entrepreneur Sean Clark, who is among others the former Co-Founder of Shoes.com. Together we founded First Block Capital earlier this year and raised $700,000 for it in one week (probably a record for a start-up in Vancouver). FBC is the management company that will eventually run several funds, including a cryptocurrency hedge fund that will be managed by Tom, and the first vehicle we started was a Bitcoin trust.
Sean and I launched the the Canadian Bitcoin Trust in June to accredited investors, with a minimum investment of $1 million per investor. But our aim was to open it for retail investors as well. That was easier said than done, because you need licenses to sell to the general public – which is a good thing in my opinion, there have been too many scams and pump & dumps in Canada. So we applied for these licenses but it will take at least a few more months to get these and we wanted to be the first to launch a product like this to the retail sector in Canada.
We managed to become the first by partnering with FrontFundr, an equity crowdfunding platform based out of Vancouver. I am a shareholder in FrontFundr and I am on their Investment Committee, so I knew they had these licenses already and that we could potentially work with them if we would prepare a so-called Offering Memorandum. Together with our law firm (Borden Ladner Gervais, BLG) we worked crazy hours over the past couple of weeks to get this done and this week we got the green light to put our offering online. Having the best law firm was not cheap, but BLG helped us to navigate the many hurdles and potential roadblocks, and they were fully committed to help us to launch as soon as possible. I am very impressed with their work, especially after having worked with many other top law firms over the past decade.
We are now officially the first investment vehicle (in Canada) that allows eligible investors to own bitcoin through owning units of a trust. We know a couple of other firms are working on similar ideas and one even tried to launch yesterday as well – too bad they didn’t know we already launched a month ago without mentioning it in the press. We have big plans for the future of the Canadian Bitcoin Trust, but I can’t write about it here until we have our licenses.
If you’re interested to own some Bitcoin you can go to our campaign on FrontFundr and invest on the site. The minimum investment amount is CAN$500, there is no maximum amount. Except for US citizens we should be able to accept investors from most countries in the world, as long as you are able to invest in Canadian Dollar (so Chinese who want to invest would have to get C$ first). If you are an accredited investor who wants to put in at least $1 million please get in touch with me directly. The press release for our launch is here.
Note: This is not investment advice! Bitcoin is very risky and investing in the Canadian Bitcoin Trust could mean losing all your money. Please read the Offering Memorandum that we published on FrontFundr site before making any investment decisions.