The primary cryptocurrency index fund has made its debut in OTC markets. Bitwise’s large-cap index fund, the Bitwise 10 Index Fund (BITW), is listed on OTCQX and could be traded utilizing brokerage accounts. The fund has $120 million in assets under management and can observe the Bitwise 10 Giant Cap Crypto Index, which is a market capitalization-weighted index holding 10 of the biggest cryptocurrencies, representing 80% of the general worth of crypto markets.
Its prime holdings, as of this writing, are Bitcoin (75%) and Ether (13%), and the remainder consists of different cryptocurrencies comparable to XRP and litecoin. In response to the corporate’s press release, the fund was up by 184% in worth this 12 months. Bitwise has partnered with Coinbase, a number one cryptocurrency trade, for custody of its belongings.
Key Takeaways
- Developed by Bitwise, the Bitwise 10 Index Fund (BITW) is the primary crypto index fund listed on OTC markets.
- The fund is meant to develop the universe of crypto investing merchandise and is aimed toward monetary advisors.
A Product Geared toward Monetary Advisors
Because of the risky nature of cryptocurrency markets, most funding merchandise utilizing them are for accredited investors, or buyers who’ve a a lot greater tolerance for threat than retail buyers. Such merchandise are sometimes costly and commerce at a premium as a result of they supply entry to Bitcoin, a scarce asset whose worth has elevated prior to now couple of months.
Bitwise additionally adopted the tried-and-tested route and already has funds aimed on the identical class of buyers. Nevertheless, that is the corporate’s first foray into designing an funding car aimed toward monetary advisors and, by extension, retail buyers. Bitwise had beforehand submitted functions for a Bitcoin exchange-traded fund (ETF), however the SEC rejected these functions.
So far, monetary advisors have been hesitant to recommend Bitcoin or cryptocurrencies to their shoppers, however Bitwise has a concept for why that is so. “Monetary advisors are longing for a protected and simple method to allocate to crypto for shoppers,” Matt Hougan, chief funding officer at Bitwise, told Coindesk, including that the fund’s diversified nature meant that it’s going to assist buyers acquire exposures to different cryptocurrencies past Bitcoin.
Hougan additionally made particular point out of the variations between BITW one other well-liked crypto funding car, Grayscale’s Digital Giant Cap Fund (GDLC). The latter, which can also be traded on OTC markets, doesn’t observe an index and has a management fee that’s greater than that of Bitwise’s fund. These variations, nonetheless, add range to the crypto-investing merchandise obtainable within the present market.
