on the crypto
Bitwise Asset Management, a provider of cryptocurrency index funds for professional investors, announced Wednesday that its 10 Crypto Index fund is now available to US investors as a publicly traded cryptocurrency index fund.
The new Bitwise product
After an analysis by the Financial Industry Regulatory Authority (FINRA), the Bitwise 10 Crypto Index Fund was authorized to be listed on over-the-counter markets and trades under the symbol "BITW," the company said in a Press release.
The fund's shares will be tradable through traditional brokerage accounts and the assets will be held in the Coinbase Custody Trust Company. The fund will track the Bitwise 10 Large Cap Crypto Index, a diversified and market capitalization weighted index of the ten largest cryptocurrencies. As of November 30, the fund held approximately 75% bitcoin (BTC) and 13% ethereum (quotation ETH).
According to Hunter Horsley, co-founder and CEO of Bitwise, this gives investors exposure to cryptocurrencies "without trying to pick winners or having to constantly monitor rapid changes in the space."
"BITW is designed for financial advisors," said Matt Hougan, Bitwise's chief investment officer. "Financial advisors are eager for a simple and secure way to allocate cryptography for clients."
Bitcoin isn't everything
The news came after the company had failed its attempts to gain US Securities and Exchange Commission approval for a bitcoin-focused fund. While many Exchange Traded Funds (ETFs) have focused only on bitcoin, Hougan said having a cryptocurrency index fund gives investors exposure to multiple cryptocurrencies, with many having outperformed bitcoin so far this year.
Unlike an ETF, BITW's shares are exempt from registration with the SEC. However, BITW's launch won't stop the company from pursuing a bitcoin ETF, Hougan said. Bitwise had more than $ 100 million in assets under management at the end of October.
The company attributed the significant growth to growing demand from hedge funds, financial advisors and multifamily offices. "The crypto world is more than bitcoin," Hougan said.
Beat the competition
Bitwise will not enter this crypto funds space without facing some established competitors. Grayscale, the oldest and largest digital currency asset manager, also offers a similar investment product, Grayscale Digital Large Cap Fund, with approximately $ 170,6 million in digital asset holdings, according to a document published by Grayscale at beginning of December.
Hougan clarified that Grayscale's Digital Large Cap Fund is not an index fund because it holds a basket of five cryptocurrencies without tracking an index. And while the Grayscale product requires a 3% handling fee, BITW is slightly cheaper at 2,5%.
S&P Dow Jones Indices, a leading financial data firm, said last week that it will launch a customizable cryptocurrency indexing service this year, given the growing interest of institutional investors in cryptocurrencies.
