First Cryptocurrency Index Fund Listed on OTC Markets

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First Cryptocurrency Index Fund Listed on OTC Markets

The first bitcoin index fund has debuted in over-the-counter marketplaces. The Bitwise 10 Index Fund (BITW), Bitwise’s large-cap index fund, is listed on OTCQX and may be traded via brokerage accounts. The fund will handle $120 million in assets and will follow the Bitwise 10 Large Cap Crypto Index, which is a market capitalization-weighted index that holds ten of the major cryptocurrencies, accounting for 80% of the total value of crypto markets.

As of this writing, its major assets include Bitcoin (75%), Ether (13%), and other cryptocurrencies such as XRP and litecoin. According to the company’s press statement, the fund’s value has increased by 184% this year. For asset custody, Bitwise has teamed with Coinbase, a renowned bitcoin exchange.

Key Takeaways

  • The Bitwise 10 Index Fund (BITW), created by Bitwise, is the first crypto index fund to be listed on OTC markets.
  • The fund is targeted at financial advisers and aims to broaden the array of crypto investment solutions.

A Product Aimed at Financial Advisors

Because cryptocurrency markets are unpredictable, most financial products that use them are for accredited investors, or those with a significantly greater risk tolerance than normal investors. Such goods are sometimes costly and trade at a premium because they allow access to Bitcoin, a rare commodity whose value has risen in recent months.

Bitwise has also taken the tried-and-true path and already has funds geared at the same kind of investor. This is, however, the company’s first attempt into creating an investment vehicle geared at financial advisers and, by extension, individual investors. Bitwise has previously applied for a Bitcoin exchange-traded fund (ETF), but those applications were denied by the SEC.

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Financial advisers have been cautious to offer Bitcoin or cryptocurrencies to their customers in the past, but Bitwise has a hypothesis as to why this is the case. “Financial advisers are hungry for a secure and straightforward approach to allocate to crypto for clients,” said Matt Hougan, chief investment officer at Bitwise, adding that the fund’s diverse structure will allow investors to obtain exposure to cryptocurrencies other than Bitcoin.

Hougan also highlighted the distinctions between BITW and another famous cryptocurrency investment vehicle, Grayscale’s Digital Large Cap Fund (GDLC).The latter, which is also traded on OTC marketplaces, does not follow an index and has a greater management fee than Bitwise’s fund. These distinctions, however, contribute to the variety of crypto-investing products on the market today.

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