Jersey's GABI bitcoin fund slated to launch tomorrow

The tiny island nation of Jersey is set to launch a new bitcoin-backed fund tomorrow. The Channel Islands’ Financial Services Commission approved the Global Advisors Bitcoin Investment Fund (GABI) earlier this month, opening the door for the fund. Unlike traditional bitcoin purchases, GABI will be available to institutional investors, such as pension funds, insurance companies and brokerages. It will not, however, be available to the general public.

The performance of GABI is being seen by many bitcoin investors and speculators as an early test of demand for the forthcoming exchange-traded funds (ETFs), most notably the Winklevoss Bitcoin Trust. GABI isn’t an EFT, as it won’t be listed on an exchange, but it does mark the closest approach a hedge-fund instrument has come to a fully public offering. The fund’s minimum investment is $100,000 U.S.

By comparison, the Winklevoss fund is still slowly trudging its way through the Securities and Exchange Commission (SEC) process, with no launch date even after submitting several rounds of revisions. With the announcement last month that the Winklevoss trust, once approved, would be trading on the NASDAQ under the symbol COIN, many have suggested that SEC approval is eminent. Until that happens, however, GABI may be the best bet for large-scale investors to buy into bitcoin.

Should GABI perform well, particularly after its launch on August 1, it could indicate a long-speculated massive demand in the European finance world for bitcoin. While there are a few ETF-like funds currently on the market, such as the SecondMarket-backed Bitcoin Investment Trust (BIT), Jersey’s unique legal status, which as often resulted in claims it is a “tax haven,” allow it a greater range of potential investors than it would under U.S. law.