on the crypto
Bermuda-based cryptocurrency firm CrossTower plans to launch a hedge fund later this month in an effort to compete with Grayscale's Bitcoin Trust (GBTC) and other bitcoin funds for accredited investors.
The boom of the Bitcoin Trust Funds
Similar to what happened to the Tesla boom (TSLA) which created greater global demand for electric vehicles, GBTC's success with $ 20 billion in assets under management (AUM) meant that a large amount of funds followed. example, says cryptocurrency analyst Kevin Rooke.
Recently, crypto lending agency BlockFi registered a Bitcoin Trust with the United States Securities and Exchange Commission, and Bitwise announced it is working to get regulatory approval to publicly trade its bitcoin fund shares on an over -the-counter, similar to GBTC's secondary market.
Cross Tower Bitcoin Fund
The CrossTower Bitcoin Fund will not trade in a secondary market, but is looking to be competitive on management fees and liquidity. The fund charges a management fee of 60 basis points, or 0,6%, compared to GBTC's 2% management fee, said Kristin Boggiano, co-founder and president of CrossTower.
“We are building infrastructure for CrossTower so that those who want to manage their risk have different tools to do so, regardless of whether they want to use an exchange, a loan or a short investment,” Boggiano said.
The minimum investment amount is $ 100.000 and CrossTower has $ 20 million in AUM offered by early investors to get you started. The product has met with the greatest interest from family offices, Boggiano added. "This is a huge benefit for family offices," said James Seyffart, ETF research analyst at Bloomberg Intelligence, referring to the fact that there are no hedge fund lockouts.
A new way to gain exposure to Bitcoin
CrossTower hired Grant Thornton as the accounting firm for the fund, Apex as a director, Schulte Roth as the law firm, and Anchorage as the custodian. It is also a way for US investors with offshore accounts to gain exposure to bitcoin from foreign tax havens.
The fund is only offered to accredited investors and has a traditional master-feeder structure, which is an investment vehicle that allows CrossTower to pool investor capital in the United States and around the world.
Non-US companies and corporations and offshore companies can use the fund for invest in a tax-free environment in the United States. The fund is limited to 99 US investors but is open to an unlimited number of offshore investors due to how the fund has been structured for daily redemptions, Boggiano said. A different fund structure in the more capital-intensive Bermuda would allow CrossTower to capture more of the US market.
