- Bitwise manages the largest digital asset index fund in the world, the Bitwise 10 Crypto Index Fund
- Bitwise success shows that investors want exposure to more than just Bitcoin
Bitwise Asset Management, a digital asset index fund provider, surpassed $1 billion in assets under management, the company announced Tuesday.
Bitwise launched the Bitwise 10 Crypto Index Fund (ticker BITW), the largest digital asset index fund in the world, in 2017. The fund now has more than $900 million in AUM.
BITW differs from bitcoin-only funds, such as Grayscale’s Bitcoin Trust, because it is diversified across a variety of digital assets. More than 20 percent of BITW’s holdings are allocated to alternative digital assets, including ethereum and litecoin.
Digital assets other than bitcoin and ether, collectively dubbed “alts,” behave as higher beta crypto assets. Alts have greater volatility than bitcoin, and tend to outperform in extreme upswings. It’s a similar relationship that risky technology stocks have to more stable S&P 500 companies.
Crypto exchange FTX’s Altcoin Index Perpetual, which tracks a basket of alts, is up 180 percent year-to-date compared to bitcoin’s 60 percent rise. If the bull run in digital assets continues, outperformance in alts may tempt investors to allocate to products like BITW that are exposed to more than just bitcoin.
“In many cases, it took months, or even years, of education before investors were ready to make their first allocation to crypto,” said Matt Hougan, chief investment officer at Bitwise. “But the growth of DeFi and the growth of interest in ethereum has really been remarkable over the last six months, and you’re now seeing people who recognize that crypto is more than just Bitcoin.”
Bitwise recently launched the world’s first decentralized finance index fund, betting that high net worth investors will want exposure to the rapidly growing industry that may fundamentally change large parts of the legacy financial system.
“People know that the legacy financial system is ripe for disruption,” said Hougan, “they see the volumes and fees being generated by DeFi apps and they want exposure to that growth.”