The announcement of the listing of shares of the Trust named Truth Social Bitcoin ETF marks a significant step in the world of investments related to Bitcoin.
The Trust, based in Nevada, offers a simple and regulated way to invest in bitcoin, reducing the operational complexities typical of the direct purchase of the financial asset.
Structure and management of the Trust
The Trust operates according to an agreement between the Sponsor, Yorkville America Digital, LLC, and a designated trustee. The core of the management is the security of the bitcoin held, entrusted to the company Foris DAX Trust Company, LLC.
This company uses custody techniques in cold storage, a method that keeps private keys offline to minimize the risks of cyber theft. Each share therefore represents a fractional and undivided portion of the total net assets, consisting mainly of bitcoin and cash reserves.
This structure allows investors to hold shares that directly reflect the performance of Bitcoin, without having to worry about the technical complications of direct ownership.
Investment objective and daily evaluation
The main objective of the Trust is to reflect the price performance of Bitcoin, net of expenses and liabilities. To do this, the net asset value, known as NAV (Net Asset Value), is calculated daily at 4:00 PM ET, primarily based on the CF Benchmarks index.
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The CF Benchmarks index is an international parameter that aggregates the spot prices of Bitcoin from various selected exchanges, such as Crypto.com, Coinbase, Gemini, and Kraken. The calculation methodology involves a weighted average of the average transaction prices, observed between 3:00 PM and 4:00 PM ET.
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This regularity and transparency in the reference price ensure investors a reliable evaluation point, consistent with the global market.
Operating modes: creation and redemption of shares
The Trust issues and redeems shares through a mechanism called Basket, consisting of 10,000 shares each. This process is reserved for the so-called Authorized Participants, qualified authorized financial intermediaries. The issuance of shares occurs with the deposit of bitcoin or equivalent money, while the redemption allows obtaining bitcoin or money in exchange for the shares.
The creation and redemption operations are subject to strict daily time cutoffs, coordinated with the NAV assessment and the market price of bitcoin. Additionally, the Trust provides real-time updates during trading sessions through the Intraday Indicative Value (IIV), which shows the estimated intraday value of the shares.
This structure helps to keep the market price of the shares aligned with the actual underlying value in bitcoin.
Custodian security and “cold storage” technology
The security of the digital assets held by the Trust is entrusted to the custodian Foris DAX Trust Company, LLC, which employs cold storage technology. This methodology consists of storing the private keys of bitcoin in a completely offline environment, isolated from any internet connection.
This precaution drastically reduces the risk of digital theft or hacker attacks, ensuring a high standard of security for the activities held.
Trading and regulated surveillance on NYSE Arca
The shares of the Trust will be traded on the NYSE Arca market during the hours from 4:00 to 20:00 ET. The entire operation takes place within the regulatory framework of NYSE Arca, which includes minimum limits on price variations and temporary suspensions in case of market turbulence or technical malfunctions.
Furthermore, the surveillance of trading is entrusted to NYSE Arca in collaboration with FINRA (Financial Industry Regulatory Authority), ensuring strict compliance with market regulations. This control system serves to prevent manipulations and fraud, increasing transparency and investor confidence.
Fundamental Characteristics of Bitcoin in the Context of Trust
Bitcoin is a digital asset decentralized, created and transferred through a peer-to-peer network without control by central entities. The system is based on cryptographic protocols and a process known as mining: a specialized procedure for validation and creation of new units of the asset.
The total quantity of bitcoin is limited to 21 million units, with about 19.8 million already in circulation as of December 31, 2024. The future creation of bitcoin follows a system of periodic halvings (halving), which occur approximately every four years, progressively reducing the new supply and maintaining a programmed scarcity.
These characteristics make Bitcoin a rare asset protected from the typical devaluation of traditional currencies, an aspect particularly appreciated by investors.
Advantages and investment prospects through the Trust
The Trust allows institutional and retail investors to have exposure to Bitcoin while avoiding the operational difficulties related to private keys and unregulated platforms. Additionally, thanks to the public listing, investors can buy and sell shares in the regulated market, with daily liquidity and transparency.
This solution fits into a context of growing demand for financial instruments that offer regulated exposure to criptovalute. Consequently, the Trust could stimulate greater participation in the digital asset market, opening new investment channels.
Final considerations: a step towards the integration of cryptocurrencies in financial markets
The proposal to trade shares of the Truth Social Bitcoin ETF, B.T. represents a significant evolution for the financial sector, integrating Bitcoin in a regulated and accessible format.
Investing in bitcoin via listed Trusts reduces operational risks and increases transparency, fundamental factors for attracting new capital. Furthermore, the collaboration between Exchanges, qualified custodians, and supervisory authorities contributes to building a reliable and competitive ecosystem.
Towards the future, this tool could facilitate the expansion of financial activities based on cryptocurrencies, offering investors a safe and simple way to participate in this dynamic market. Consequently, following the trend of these Trusts and understanding the opportunities they offer becomes essential for those who want to stay updated on the evolutions of digital investments.