High net worth investors can now gain exposure to speculative bitcoin mining through what’s being billed as the world’s first "bitcoin mining fund".
Logos Fund, a Regulation D offering, is positioning itself as an alternative to products like the Bitcoin Investment Trust (BIT), the private investment vehicle launched by Digital Currency Group CEO Barry Silbert, by creating an offering that blends bitcoin mining with buy-and-hold investing.
The fund was created by Marco Streng, founder of hosted cloud mining company Genesis Mining. Logos Fund managing partners include Björn Tilmann Arzt, global head of structured capital markets at UniCredit, and Dr. Florian Putzka, senior legal professional at UniCredit, though the Italian financial group is itself not directly involved.
Streng said that the fund aims to be a "safe vehicle" for investment in bitcoin, and that his hosted mining firm, Genesis Mining, will serve as the Logos Fund’s initial partner.
Streng told CoinDesk:
"Mining can be profitable, but you have to have the right infrastructure, lowest electricity prices. We want to use all our expertise and infrastructure to enable external investors to leverage on bitcoin."
Genesis Mining offers a service typically called hosted bitcoin mining, or cloud mining, in which customers can purchase contracts for a certain amount of hashing power on machines hosted at the company’s facility.
The difference between Logos Fund and Genesis Mining, Streng said, is that the fund owns the hardware directly, and that it is not wholly dependent on proceeds from mining. Arzt told CoinDesk that there is "no corporate or other close link" between the two companies.
To participate in the fund, investors will need to spend an unspecified minimum amount and agree to hold their funds in Logos Fund for a certain period of time. Streng said interested investors are able to access details by contacting the fund directly.
Overall, Streng positioned the offering as one that gives high net worth investors yet another option when determining how to invest in digital currencies, one he contends has its benefits compared to other available options.
"Mining can be profitable even if bitcoin price is declining. You can still make a profit," Streng said.
Logos Fund intends to register as with the German financial regulator BaFin so that the offering can be available to EU investors.
"The application is in the process of being approved and we are waiting for positive feedback from BaFin within the next 4 weeks," Arzt said.
Disclaimer: CoinDesk is a subsidiary of Digital Currency Group, which operates Bitcoin Investment Trust.
Mining image via Shutterstock