Wilshire Phoenix, which is an alternative investment business, just filed an S-1 registration with the United States Securities and Exchange Commission. The purpose of the registration is for a publicly traded Bitcoin fund that is in line with regulatory standards. The registration application states that the shares will give investors exposure to Bitcoin in a way that is accessible and cost-effective with less uncertainty and fewer complicated rules around buying or holding onto the cryptocurrency.

Called the Bitcoin Commodity Trust, it aims to make shares available for public trading on the OTC Markets Group Inc.'s forum, which is called OTCQX Best Marketplace. After the shares are issued by the firm, investors can buy or sell them during a trading day. They will work like any other security for trading.

This looks like it will be similar to the Bitcoin Trust fund set up by Grayscale. The Wilshire product will allow the general public to buy shares of Bitcoin in a mainstream market. All of the shares will be priced according to the going rate of Bitcoin and are backed by Bitcoin. The value of the cryptocurrency assets held by BTC will follow the Chicago Mercantile Exchange's Bitcoin price index. This is also referred to as the Chicago Mercantile Exchange CF Bitcoin Reference rate, or CMECFBRR. It is an index that tracks the price of Bitcoin across many exchanges. It is also the same rate that is used to create cash settlements of Bitcoin futures. It functions as the pricing service for Bitcoin trading products.

The only problem with the setup is a high premium. The consumer will pay a higher price compared to if they just went to a cryptocurrency market and bought a share of Bitcoin or an entire Bitcoin on their own. A 2 percent annual custodial fee is one of the highest in the industry. Wilshire Phoenix will have a fee of 0.9 percent, which is lower. The trust will have a recurring expense of the sponsor's fee, which is the transaction cost from buying Bitcoin. The Wilshire Phoenix firm also has an established relationship with Coinbase.