Key Takeaways
- • Bitwise launched the Bitwise 10 Index Fund (BITW), the first cryptocurrency index fund listed on OTC markets, trading on OTCQX with $120 million in assets under management as of December 2020.
- • The fund tracks the Bitwise 10 Large Cap Crypto Index, a market-cap-weighted index of the 10 largest cryptocurrencies representing approximately 80% of total crypto market value, with Bitcoin (75%) and Ether (13%) as top holdings.
- • BITW gained 184% in value during 2020 and represents Bitwise's first investment vehicle designed for financial advisors and retail investors, marking a departure from the firm's previous focus on accredited investors only.
- • Coinbase provides custody services for the fund's assets, and the launch follows Bitwise's prior unsuccessful applications to the SEC for a Bitcoin exchange-traded fund.
Summary
Bitwise Asset Management introduced the Bitwise 10 Index Fund (BITW) to OTC markets, establishing the first publicly traded cryptocurrency index fund accessible through standard brokerage accounts. Listed on OTCQX, the fund held $120 million in assets under management and was designed to broaden access to cryptocurrency investing beyond traditional accredited investor channels.
The fund tracks the Bitwise 10 Large Cap Crypto Index, a market-capitalization-weighted benchmark comprising the 10 largest digital assets. These holdings collectively represent approximately 80% of the total cryptocurrency market value. As of the fund's launch in December 2020, Bitcoin constituted 75% of the fund's holdings, Ether represented 13%, with the remaining allocation distributed among other major cryptocurrencies including XRP and Litecoin.
The fund's performance during 2020 was substantial, appreciating 184% in value for the year. Bitwise structured BITW as its initial foray into designing investment products for financial advisors and retail investors, a strategic shift from its prior emphasis on accredited investors who typically access higher-fee, premium-priced cryptocurrency investment vehicles. Coinbase, a leading cryptocurrency exchange, was selected as the custodian for the fund's assets. The launch followed Bitwise's previous unsuccessful attempts to obtain SEC approval for Bitcoin exchange-traded fund products, suggesting the OTC listing provided an alternative path to market access.
The introduction of BITW addressed a market gap for diversified cryptocurrency exposure at reduced cost compared to traditional accredited investor funds. The OTC structure circumvented certain regulatory hurdles associated with ETF registration while still providing liquidity and transparency through established brokerage infrastructure.
The fund tracks the Bitwise 10 Large Cap Crypto Index, a market-capitalization-weighted benchmark comprising the 10 largest digital assets. These holdings collectively represent approximately 80% of the total cryptocurrency market value. As of the fund's launch in December 2020, Bitcoin constituted 75% of the fund's holdings, Ether represented 13%, with the remaining allocation distributed among other major cryptocurrencies including XRP and Litecoin.
The fund's performance during 2020 was substantial, appreciating 184% in value for the year. Bitwise structured BITW as its initial foray into designing investment products for financial advisors and retail investors, a strategic shift from its prior emphasis on accredited investors who typically access higher-fee, premium-priced cryptocurrency investment vehicles. Coinbase, a leading cryptocurrency exchange, was selected as the custodian for the fund's assets. The launch followed Bitwise's previous unsuccessful attempts to obtain SEC approval for Bitcoin exchange-traded fund products, suggesting the OTC listing provided an alternative path to market access.
The introduction of BITW addressed a market gap for diversified cryptocurrency exposure at reduced cost compared to traditional accredited investor funds. The OTC structure circumvented certain regulatory hurdles associated with ETF registration while still providing liquidity and transparency through established brokerage infrastructure.
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