Bitcoin fund for the public?

Now everyone can have a slice of the Bitcoin market.

Bitcoin Investment Trust, or BIT, is slated to become the first publicly traded Bitcoin fund. The Wall Street Journal reports BIT has been racing a fund offered by the Winklevoss twins to be the first to launch publicly.

Currently BIT is only available to accredited investors with incomes greater than $200,000 per year or assets above $1 million.

Will opening the trust to the public give greater legitimacy to Bitcoin? Not quite, says Yahoo Finance Senior Columnist Michael Santoli.

“The way they're winning the race to the public markets is by taking a shortcut and doing it on the Over-The-Counter market,” he notes. “It’s not going through a full SEC review for a regular exchange, which the Winklevoss fund is doing. I don’t really think they've magically gotten legitimacy for Bitcoin as an asset class, but I do think it shows you this is an area that’s maturing.”

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The value of Bitcoin has plummeted over the past year, from over $800 per coin in 2014 to under $300 today. Santoli points out that the uses for Bitcoin are not limited to just being a store of value.

“The optimists will say, and I’ve often wondered about this, it can be a really good payment protocol without necessarily having each Bitcoin worth all that much,” he says. “It’s not clear to me they have to operate in tandem like that.”

Total market capitalization for cryptocurrencies is over $4 billion, according to coinmarketcap.com. Santoli notes that Bitcoin is not a particularly large asset class.

“Remember the number of Bitcoin is going to be capped at some point down the road,” he says. “It’s not as if it can accommodate the world deciding that this is a great place to store some money, or replace gold for example, unless the price goes up a whole lot.”

Santoli adds that the trust funds won’t smooth out Bitcoin's volatile pricing immediately.

“They'd have to get a lot bigger relative to the size of the Bitcoin market, and that's not what you want to see as far as I'm concerned. I don't think you want it to be a speculative instrument.”