Bitwise says that this launch was "driven by inbound client interest and investor dissatisfaction with existing options, many of which carry premiums, charge exit fees, have lockups, and/or charge expenses to the fund outside the stated management fee."
- Strategy: Direct ownership of the underlying asset
- Fund Registration: Exempt under Section 4(a)(2) of the Securities Act of 1933 and Rule 506 of Regulation D (therefore, only available to U.S. "accredited investors")
- Minimum Investment: $25,000 for "Investor Shares" and $1 million for "Institutional Shares"
- Annual Fee: 1.5% for "Investor Shares" and 1.0% for "Institutional Shares" (compared to 2% for the Grayscale Bitcoin Investment Trust)
- Redemptions: Weekly
- Auditor: Cohen & Company
- Custodian: Kingdom Trust (underlying assets held 100% in cold storage)
Hunter Horsley, Co-Founder and CEO of Bitwise, said:
"The 68% drawdown in bitcoin prices this year has given investors a unique opportunity to enter the market at prices many thought we'd never see again. Though an ETF has not yet been approved, investors and advisors like the fund format because it's professionally managed and simplifies access to best-in-class custody, trading, reporting, and tax preparation, and allows for the safe capture of events like hard forks and airdrops."
Matthew Hougan, the Global Head of Research at Bitwise, stated:
"With significant positive developments on the horizon, including the launch of the Bakkt bitcoin futures exchange from ICE, the launch of Fidelity Digital Assets, and the continued movement of institutional investors like Yale University and Stanford University into the crypto space, we have seen significant inbound demand for high-quality bitcoin and ether funds. Our clients have been adding to their positions throughout the downturn, and many who've been following the space for a while are using this opportunity to finally come in."
Featured Image Courtesy of Bitwise Asset Management