Bitwise Asset Management, creator of what it says is the world’s first cryptocurrency index fund, has launched two new low-cost, liquid beta funds, holding bitcoin and ether exclusively.
The Bitwise Bitcoin Fund and the Bitwise Ethereum Fund are the second and third strategies in the Bitwise fund family, joining the broad-market Bitwise 10 Private Index Fund.
The launch of the funds is driven by inbound client interest and investor dissatisfaction with existing options, many of which carry premiums, charge exit fees, have lockups, and/or charge expenses to the fund outside the stated management fee.
“The 68 per cent drawdown in bitcoin prices this year has given investors a unique opportunity to enter the market at prices many thought we’d never see again,” says Hunter Horsley, Bitwise CEO. “Though an ETF has not yet been approved, investors and advisors like the fund format because it’s professionally managed and simplifies access to best-in-class custody, trading, reporting, and tax preparation, and allows for the safe capture of events like hard forks and airdrops.”
The Bitwise Bitcoin Fund holds bitcoin and aims to capture the total returns available to investors in the world’s largest cryptoasset, including any meaningful hard forks and air drops. The Bitwise Ethereum Fund does the same for ether. Funds safeguard holdings in 100 per cent cold storage with an institutional third-party custodian, and prepare simple K-1 tax documents for investors each year.
The funds are available today in two share classes: Institutional Shares have an all-in expense ratio of 1.0 per cent and a minimum investment of USD1 million, while Investor Shares have an all-in expense ratio of 1.5 per cent and a minimum investment of USD25,000. Investors can come in and out of the fund weekly, with no lockups, withdrawal fees, or performance fees. The funds are open to US-accredited investors.
“With significant positive developments on the horizon, including the launch of the Bakkt bitcoin futures exchange from ICE, the launch of Fidelity Digital Assets, and the continued movement of institutional investors like Yale University and Stanford University into the crypto space, we have seen significant inbound demand for high-quality bitcoin and ether funds,” says Matt Hougan, global head of research for Bitwise. “Our clients have been adding to their positions throughout the downturn, and many who’ve been following the space for a while are using this opportunity to finally come in.”