With New Fund, Bitwise Aims to Capture Renewed NFT Interest

The index fund holds a portfolio of high-value NFTs, including CryptoPunks and Bored Ape Yacht Club


Bored Ape Yacht Club | Source: NTFS.WTF


key takeaways

  • Investors seeking exposure to top-tier NFT projects without a hefty buy-in are seeking out Bitwise Asset Management’s new fund
  • Although NFT sales are down about 218% from their August 2021 peak, they’ve been steadily rising for the past month

With NFT trading volumes on the rise, Bitwise Asset Management sees an opening to showcase its new fund to institutional investors.

The crypto investment firm launched its Blue-Chip NFT Index Fund last month with a focus on the 10 most valuable NFT collections by floor price market capitalization. Demand for the fund has been growing since, Bitwise Co-founder and CEO Hunter Horsley told Blockworks.

“Demand [for the fund] has been interesting, it’s a more specific investor,” Horsley said. “We serve hundreds of financial advisory firms across the country and our products like BITQ and BITW are where a lot of people start, but we’ve seen high-net worth individuals and advisors who have enthusiastic clients come in over the first month.”

The entry costs to owning the likes of a Bored Ape Yacht Club NFT — priced at a minimum of 84.5 ether, or $273,385 — are steep, so even wealthy individuals are looking for alternative ways to gain exposure to the space. Case in point: the fund has a minimum investment of $25,000.

The fund, which is rebalanced quarterly, focuses on the 10 most valuable NFT collections by market cap: Bored Ape Yacht Club, CryptoPunks, Mutant Ape Yacht Club, Cool Cats, VeeFriends, Autoglyphs, Meebits, Fidenza, CyberKongz Genesis and Chromie Squiggle.

This product has less frequent redemptions than the Bitwise 10 Crypto Index Fund, or BITW, Horsley said. It permits monthly redemptions after a six–month lockup. 

The Blue-Chip NFT Index Fund is up 5.6% from its mid-December inception through Jan. 19, compared to the BITW, which is down 14.2% on the month but up 29.6% over the past 12 months. 

In 2021, users sent over $44.2 billion worth of cryptocurrency through NFT marketplaces, according to a report by blockchain analytics company Chainalysis. 

Horsley expects that interest to continue to grow this year. 

“There’s been a steady stream [of demand] in December and January, primarily from high net worth individuals,” Horsley said. Demand for the NFT index has been similar to other hot sectors like decentralized finance (DeFi), he said. 

Sticking to popular NFTs — the top 10 traded about $1.5 billion at the start of this month — are important for the fund to ensure liquidity, according to Horsley. Liquidity dries up quickly outside of the top 10 to 20 projects, he said. 

“For this portfolio liquidity can be a challenge even still, but it’s doable,” he said. “If you move into mid caps or smaller assets it becomes more difficult.” 

Bitwise managed over $1.3 billion overall at year end. The firm is known for managing the world’s largest crypto index fund, BITW, and creating products focusing on Bitcoin, Ethereum, DeFi, and crypto-focused equity indexes.

NFT sales were $563 million on Wednesday, down from an all-time high of $1.79 billion in sales last August, according to NFT data tracker NonFungible. Although NFT sales are down about 218% from its peak, they’ve been steadily rising for the past month. 

“I think NFTs will explode in 2022,” Horsley said. “They are early in their life and similar to the early days of Bitcoin and Ethereum, they’re undeniably being pulled into the world.”

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.


Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2023

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Unlocked by Template.png


With the spot ETH ETF approval, the institutions are coming. stETH - given its dominance in marketshare, existing liquid market structures, and highly desirable properties - is poised for institutions.


The QT taper begins this month…but what does that mean for markets?


Plus, the rise of RWAs could bring about a significant shift in how real-world investments are managed and accessed


The distributed cell plan provider started selling its own hotspots in October 2023


The Brazil-based asset manager’s filing comes during a year of milestone bitcoin and ether fund approvals


The purchase of five sites in Georgia set to help CleanSpark hit its mid-year operating hash rate target of 20 EH/s


Plus, it’s beginning to look like we may be in for a cruel summer