Bitwise: The First Cryptocurrency Index Fund

Episode 20
  • Host

    Zach DeWitt

  • Guests

    Hunter Horsley

    Bitwise

  • Date

    February 26, 2019

  • Duration

    40 minutes

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What is a crypto index fund?

Tune in as our guest, Hunter Horsley, CEO and cofounder of Bitwise, discusses how crypto index funds work, the firm’s Bitcoin ETF application, and how it could potentially impact the space if it gets approved.

Bitwise is the first cryptocurrency fund

Bitwise is the leading provider of index funds in the crypto space. They launched the first cryptocurrency index fund in 2017, and they have both index products as well as beta products.

Based in San Francisco, the Bitwise team combines modern software expertise with deep asset management experience, coming from firms including Facebook, Wealthfront, and BlackRock.

They produce a top ten exposure that rebalances monthly that doesn’t have a strong opinion about how the future will play out, but allows you to participate in whatever that ends up being.

Bitwise facilitates institutional buyers

There are amazing tools that are oriented toward self-directed individual investors, which, in the US, represents about $3 trillion in assets. But there is a much bigger market opportunity.

Bitwise is paving the way for more institutional capital to invest in crypto assets. Americans who invest their savings with a professional advisor represent around $20 trillion in assets. Pensions and endowments in the US represent about $24 trillion in assets.

Those audiences today don’t have the best set of solutions available. They have a different set of needs than the individual investor, and that’s what Bitwise is focusing on.

Bitcoin ETF application

In January 2018, Bitwise filed its application for a Bitcoin ETF, which would be a very positive catalyst for the industry. What would it mean for the industry if this gets approved?

ETFs and mutual funds are the main ways that most investors participate in different asset classes. Mutual funds in the US manage somewhere around $15 trillion in assets. ETFs have been rapidly growing over the last decade, and are somewhere around $4 trillion.

What’s different about mutual funds and ETFs is they can serve any investor. “It expands the audience you can serve, and it plugs into existing infrastructure.”

Key takeaways:

  • The size of the institutional investor base is orders of magnitude larger than the retail investor base, and institutional investors have yet to come into crypto;
  • Bitwise is the first cryptocurrency fund and filed an application to launch the first Bitcoin ETF;
  • With Bitwise, investors can rest assured their assets have proper custody, reporting, and oversight;
  • If interested in investing with Bitwise, check out their website at www.BitWiseInvestments.com.

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