Bitwise Asset Management announced recently that traders transferred over $67M worth of shares of its new crypto index fund for the three days of trading.
The company from San Francisco debuted the Bitwise 10 Crypto Index fund last Wednesday, December 9.
It states that this shattered Grayscale’s record for the Grayscale Ethereum Trust, which traded over $9M in its first three days in June. The fund tracks the price of the ten largest cryptocurrencies.
As of yesterday, it holds $135M in assets under management. It is composed of 75% BTC, 13% ETH, and 12% from a mixture of XRP, Litecoin, Chainlink, Tezos, and others.
Bitwise’s fund is smaller than Grayscale’s similar product, the Digital Large Cap Fund, with $161M worth of Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.
These funds are the closest thing that the stock market gets to a crypto ETF. The funds represent shares in a pool of private investors’ money that the fund manager uses to buy crypto on exchanges.
They are useful for institutional investors who like to delegate crypto investments and custody to someone or retail investors who want to trade crypto from tax-efficient bank accounts. The downside is that the shares are at a premium to the underlying assets.
“As more and more financial advisors and investment professionals look to establish an allocation to crypto in their portfolios, a professionally managed index fund is a familiar and important tool,” said Bitwise’s CEO, Hunter Horsley.
The request for a Bitcoin ETF was rejected last year by the US SEC. It would differ from the recently launched crypto index fund. A Bitcoin ETF can mimic the cryptocurrency price and can change on a national securities exchange; it won’t just be available to institutional investors.
The SEC had rejected Bitwise’s request for the similar reason it left the others: the Bitcoin market is vulnerable to manipulation, the Commission said.
A Bitcoin ETF would then pose too much of a risk for the investors, the SEC stated. However, a crypto index fund that tracks a bunch of digital assets seems peachy.
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