28th Jan 2020 - 11:08am

Stack launches institutional-grade bitcoin index fund in Asia

Submitted 28/01/2020 - 11:08am

Stack, a provider of cryptocurrency trackers and index funds has launched an institutional grade bitcoin index fund in response to investor demand for controlled exposure to the high-yield potential of bitcoin globally. 

The single-asset index fund expects to capture USD750 million in assets under management during 2020, and to surpass USD2 billion in 2021, tapping into the unmet demand for traditional investment vehicles in Asia's digital asset space. Stack's list of partners includes premiere financial services providers, BitGo, Silvergate Bank, and Coin Metrics for custodian, banking, and index solutions, respectively.

Matthew Dibb, Co-founder and Chief Operations Officer of Stack, says: "We've seen a dramatic increase in the number of investors seeking to diversify their portfolios using bitcoin. Fears of a global recession, combined with deteriorating trade relations globally, are accelerating this process considerably. Bitcoin is one of the best performing assets in history—with 19x returns since 2014—and is uncorrelated with traditional markets, making it an attractive prospective investment for both individuals and institutions. In Asia, however, there are virtually no risk-adjusted investment portals for the bitcoin market, leaving investors in Asia with no opportunity to access these incredible potential returns."

The launch of Stack comes as the number of long positions being taken within the bitcoin market and demand from institutional investors for access to the digital asset economy increase. At present, investors purchasing and custodying bitcoin through digital asset management portals or traditionally structured funds pay premiums of 20-40 per cent over the underlying asset. Wealth management firms have also been capable of charging exorbitant management and performance fees, even for passively-managed single asset portfolios.

Stack's flagship Bitcoin Index fund (BTCX100) provides an alternative solution, giving investors in Asia a flexible and cost-effective means of gaining exposure to bitcoin which complies with financial industry's standards of best practice while mitigating the risks inherent to  purchasing, transacting, and storing digital assets. With a minimum investment of SGD100,000 at a 2.25 per cent management fee, Stack provides an institutional-grade alternative to the high premiums and barriers to entry which come with current digital asset hedge funds.

Mitigating the risks inherent to buying and holding digital assets, all Stack funds offer secure custody with insurance coverage, weekly contributions, redemptions, and reporting. Its first-of-its-kind product in Asia provides a streamlined, secure, and simple way to integrate BTC into an investment portfolio.

Pete Najarian, Chief Revenue Officer at BitGo, says: "Institutional investors need services and solutions from providers who understand fiduciary responsibilities. The Stack team is composed of financial services veterans who understand the needs of these investors and who are committed to security, compliance, and industry best practices. Stack is a first-of-its-kind fund in Asia and BitGo is proud to provide Stack with secure and compliant custody solutions that help mitigate risk and increase transparency for investors within the APAC region."

In addition to BitGo and Silvergate Bank, the newly launched fund has also partnered with leading cryptocurrency audit and tax practice, Cohen & Co. for auditing purposes, DRW's crypto-asset focused trading company, Cumberland, and a London-based triple A insurance syndicate to ensure best-in-class services for investors within the digital assets space. Given the importance of independent, transparent, and high quality indexes, Stack Funds has also partnered with Coin Metrics as index provider and administrator.

Bringing together over 110 years of experience within the traditional financial sector, the Stack leadership team is drawn from senior executive positions from the likes of JP Morgan, Merrill Lynch, HSBC, Dresdner Kleinwort Benson, and Lehman Brothers, representing a significant migration of leading players from the world of traditional finance to the digital assets space.

"The gap between the old world of traditional finance and the cryptocurrency industry is fading, but not fast enough. Seasoned investors expect a level of sophistication which is non-existent in the market. Stack bridges this gap—blending knowledge of what investors want and need with data-backed insights into the cryptocurrency space. Right now, especially in Asia, if you are an institution which wants to trade bitcoin – but have significant fiduciary duties—Stack really is your only option," says Stack Co-founder and Chief Marketing Officer, Michael Collett.

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