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Morgan Creek Digital, Bitwise Partner on New Digital Asset Index Fund

Morgan Creek Digital and crypto index provider Bitwise are teaming up to launch a new index fund aimed at institutional investors looking to enter the digital asset market.

The Digital Asset Index Fund offers the top 10 largest digital assets weighted by market capitalization to accredited and other major investors, with Bitwise managing the fund itself. According to its official website, the index fund is geared heavily toward bitcoin, while offering exposure to other major cryptos like ether, bitcoin cash and EOS, among others.

Anthony Pompliano, a cryptocurrency bull and a partner at Morgan Creek Digital, said in a statement that the 2018 bear market provides an opportunity for investors to build out their exposure to the market.

He separately told CoinDesk in an email:

“We have been approached by many institutional investors who want to gain exposure to digital assets. By partnering with Bitwise, the leading crypto index provider, we are able to bring an institutional-grade solution to these clients. The crypto industry continues to mature and we see this as another milestone along the way.”

Bitwise CEO Hunter Horsley told CoinDesk that the fund is geared toward simplified access.

“[Morgan Creek chief investment officer] Mark Yusko and Morgan Creek have spent more than a decade working with institutional clients and earning their trust,” he explained. “Having a firm like them partnering with investors who want to explore and get exposure to the crypto space is a huge step in making it more accessible to institutions.”

Assets stored by the fund will be kept in cold storage to improve their overall security. These assets will be governed by a set of eligibility requirements which include custody qualifications, trade concentration limits and pre-mine restrictions.

To further the fund’s security, Morgan Creek and Bitwise intend to conduct annual audits. Yusko, Pompliano and Bitwise global head of research Matt Hougan will form a committee to oversee the fund as well.

Bitwise already offers accredited investors access to cryptocurrencies through its private index funds, as previously reported by CoinDesk. The firm is also seeking to launch an exchange-traded fund based upon the top 10 cryptocurrencies by market cap.

Bitcoin image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Crypto Execs Remains Bullish, Even Amidst Bearish Setbacks

The cryptocurrency market has had its fair share of fluctuation in the past year or two, with the price of crypto assets reaching all-time highs, just to crash by over 70% subsequently. While this near-unpredictable price action has irked some shorter-term investors (speculative traders), two crypto-centric company execs, Hunter Horsley of Bitwise and Spencer Bogart of Blockchain Capital, recently appeared on Bloomberg to express their continued bullish attitude.

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Firstly, Bitwise CEO Horsley noted that investors may be starting to realize that they overreacted to the SEC’s recent “outright” denial of the Winklevoss’ Bitcoin ETF and the “procedural extension” of the VanEck and SolidX ETF verdict. Backing up this statement, Blockchain Capital partner Bogart noted that regulatory bodies are “running out of reasons to disapprove these things (ETF proposals),” as US-based exchanges have begun to adhere to the SEC’s concerns.

Additionally, Bogart added that the volatility seen in the current state of the crypto market shouldn’t be an issue, as any early-stage industry will experience vast fluctuations in price as investors try to accurately pinpoint a proper value for a certain technology, network, etc.

Bitwise CEO: There’s Still Interest For Crypto, Its Just About The Timing 

Emily Chang, the Bloomberg host leading this segment, then asked the two executives about the current levels of interest in this industry. Bitwise’s CEO, seeming ready to answer such a question, responded by stating:

This is a great question. Over the last few months, we have raised a few million dollars a month. I think what we’ve seen is that this month will be larger than last month… There’s (still) a huge amount of interest and people are wondering on the timing. They don’t want to catch a falling knife — they know that they want to do something, but they don’t know when.

He later brought up the example of the amassment of firms Bitwise has talked to, noting that 75% of 500 representatives from hedge funds, pension groups, family offices, and more would consider making a capital allocation into crypto. Horsley also noted that these firms will need to get comfortable with a crypto investment thesis before making a foray.

Expanding more on this interest, Bogart drew attention to other fundamental indicators, such as the number of developers active in developing blockchain-related solutions and the institutions that are starting to stand behind this nascent industry. The Blockchain Capital partner specifically brought up the example of Goldman Sach’s crypto trading desk, which Ethereum World News has reported on in the past, along with custody solutions for security-wary funds who have invested in digital assets.

But then again, as any logical industry leader would point out, Bogart points out that it obviously makes sense why crypto is in a slump now, as the bull run seen in 2017 was evidently unsustainable. Seemingly sharing a near-identical mindset, Bitwise’s executive added that the worldwide deployment of crypto assets and crypto-related (blockchain-related) technologies may take upwards of 10 years, as the internet did.

Closing off this interview, Bogart issued a short, but sweet statement about where the crypto market is now, and where it is headed in the near future. He stated:

The overall time is the biggest tailwind here… I think that this is market that is emerging outside of the core of the legacy financial industry, but its head directly for it.

Photo by Giovanni Calia on Unsplash

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Investment Startup Bitwise Proposes ETF for Top 10 Cryptos

Crypto investment startup Bitwise is seeking regulators’ permission to offer an exchange-traded fund (ETF) tied to the top 10 cryptocurrencies.

The Bitwise HOLD 10 Cryptocurrency Index Fund ETF would track the returns on the startup’s HOLD 10 Index. That index is the basis for a passive investment fund which itself invests in the top 10 cryptocurrencies by market capitalization. This fund “captures approximately 80 [percent] of the total market capitalization of the cryptocurrency market,” the company said Tuesday.

According to a press release, the ETF proposal addresses issues surrounding supply, liquidity, trade volume and custody, which are areas the SEC has expressed concern about in the past.

The proposal, filed with the SEC, differs from other ETF applications under the agency’s review in that it lists multiple cryptocurrencies as part of the fund, and not just bitcoin.

The news comes just hours after the regulator announced it was postponing a decision on five other proposed ETFs. Those funds were proposed by Direxion Investments, which has withdrawn similar proposals in the past at the SEC’s direction.

At the same time, there is an effort to encourage the SEC to approve another ETF proposal, offered by VanEck and SolidX. The SEC is taking comments on this proposal, and may offer a decision as soon as next month if it does not choose to delay it as well.

Cryptocurrencies image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Crypto Fund Bitwise Raises $4 Million in VC Funding

Cryptocurrency investment startup Bitwise has raised $4 million in seed funding.

Backing the San Francisco-based startup in the raise are investors including Kholsa Ventures’ Keith Rabois, General Catalyst’s Hemant Taneja and Blockchain Capital, as well as Naval Ravikant, Suna Said, Adam Ludwin, Adam Nash and Elad Gil, among others.

The funding comes as the firm officially unveils its HOLD 10 Private Index Fund, which is pitched as a way for accredited investors in the U.S. to gain exposure to the cryptocurrency market without actually having to buy the digital assets.

First announced in October, HOLD 10 will focus specifically on the top 10 cryptocurrencies by market capitalization, allowing members to simultaneously invest in bitcoin, ether, bitcoin cash and other major cryptocurrencies within the wider $466 billion market.

Bitwise intends for HOLD 10 to be a passive fund for its users, allowing them to simply invest in the fund and let it handle the rest. The fund will account for hard forks and “airdrops” of free tokens, and will follow trading volume to establish the most promising tokens in which to invest.

Bitwise co-founder Hunter Horsley explained:

“For example, in November, bitcoin was up 58 percent and other top 10 coins like bitcoin cash, dash, and monero were up over 100 percent. As a result, the HOLD 10 Index was up approximately 64 percent while having around 37 percent less volatility than bitcoin.”

Bitwise put its index through testing from the start of 2017 and found that, had it been launched at the start of January, HOLD 10 would currently be up 1,750 percent, Horsley said.

HOLD 10 was launched in a bid to make it easier for people to invest in cryptocurrencies – especially those who may not have the means to manage their own portfolio of digital assets.

“We constantly hear people say that they’d like to invest but it’s too complicated and risky to actively manage a portfolio yourself,” Horsley told CoinDesk in an email.

Man and coins image via Shutterstock

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