Bitwise, Multicoin Capital Spin Up Metaverse Index and Fund
Firms partnered with venture capitalist Matthew Ball to offer benchmark and corresponding fund
Matt Hougan, CIO of Bitwise, at Permissionless 2022 | Source: Ben Solomon
key takeaways
- The Ball Multicoin Bitwise Metaverse Index’s top holdings include ether, chainlink, solana, filecoin and polygon
- Ball said he expects tens of trillions in value to be created and reallocated to support the metaverse in the coming decades
Bitwise Asset Management has joined forces with Multicoin Capital and the managing partner of EpyllionCo to launch an index that offers exposure to cryptoassets central to the metaverse.
The Ball Multicoin Bitwise Metaverse Index is set to include up to 40 assets, the companies revealed Tuesday, and a fund tracking the index is now available to qualified purchasers for private placement subscription with a $100,000 minimum investment.
San Francisco-based Bitwise had more than $1.2 billion as of March 31. In 2017 it created what is now the world’s largest crypto index fund — the Bitwise 10 Crypto Index Fund — and expanded to other sectors, launching a DeFi fund and an NFT-focused fund last year.
The company has partnered with crypto investment firm Multicoin Capital and Matthew Ball, a venture capitalist and managing partner of EpyllionCo, which operates an early-stage venture fund. Ball co-founded the Roundhill Ball Metaverse ETF (METV) that launched in June 2021 and has $539 million in assets.
“We really assembled a dream team of experts around this topic, and I’m excited by the index and fund that’s come out of it,” Bitwise Chief Investment Officer Matt Hougan told Blockworks.
“The metaverse is a big opportunity and, if it’s going to succeed, it’s going to be built to a significant degree on crypto and public blockchains. This strategy captures that opportunity set.”
The Ball Multicoin Bitwise Metaverse Index focuses on four sectors: interoperability, ledgers, DeFi (decentralized finance) and the enabling of communities. Top holdings are ether (ETH), chainlink (LINK), solana (SOL), filecoin (FIL) and polygon (MATIC). Others include the sandbox (SAND) and decentraland (MANA).
It screens for risks around liquidity, regulation and asset integrity, and adds discretionary overweights to increase exposure to assets that, in the view of the index’s governing committee, have high growth potential.
Ball said in a statement that he expects tens of trillions in value to be created and reallocated to support the metaverse in the coming decades. Multicoin Capital Managing Partner Kyle Samani called the metaverse “one of the most audacious and exciting ideas ever conceived.”
“However, in order for it to be vastly accessible, it must be built on an open, decentralized, credibly neutral foundation, which means it must be built in large part with crypto assets and public blockchains,” Samani said in a statement. “With literally thousands of crypto assets to choose from, underwriting the most investable opportunities is a never-ending challenge.”
Hougan noted during a panel at last month’s Permissionless event that while indexing within crypto remains “super tiny,” he expects the share of indexing in the space to rise from below 1% to 20% or 30% in the next 10 years.
He added that innovation within crypto indexing will likely come in the form of yield strategies, or indexes catering to investors targeting specific sectors.
“You’re going to see the same Cambrian explosion of indexing strategies that allow people to express themselves in crypto without picking individual tokens, which has just a huge amount of idiosyncratic risk…that I think people will be increasingly less comfortable taking,” Hougan said.
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