Today we’re excited to be talking publicly about our company, Bitwise Asset Management and to announce our first product, the Bitwise HOLD 10 Private Index Fund.
Our first product.
The Bitwise HOLD 10 Private Index Fund is the first cryptocurrency index fund. It aims to make owning a portfolio easier.
The fund automatically invests in the HOLD 10 Index, a weighted basket of the 10 largest coins that account for around 85% of cryptocurrency as a whole. As of October 1, the HOLD 10 includes Bitcoin, Ethereum, Ripple, Bitcoin Cash, Zcash, Litecoin, Dash, NEO, Monero, and Ethereum Classic. It rebalances monthly.
To determine the top 10 coins, the HOLD 10 Index looks at inflation adjusted market capitalization along with several other eligibility criteria. The inflation adjustment factors in additions / reductions to supply that are known to the public and scheduled to occur over the next 5 years. More on the methodology here.
Backtested since January 1, the HOLD 10 Index had a higher return, lower volatility, and better Sharpe ratio than Bitcoin. The HOLD 10 Index should mirror the market overall. If you want to invest in the market rather than picking winners, buying the HOLD 10 is a good approach.
The fund is low cost, with a 2–3% annual management fee. It’s also extremely secure, with shares titled in your name and the underlying assets in 100% cold storage. You can request info on investing in the fund here.
Why we’re starting the company.
Hong and I believe that over time cryptocurrency has the potential to become one of the most meaningful technological developments of the early 21st century. We of course recognize it has a long way to go and that the future is not certain. That said, we’re optimistic and believe that over time more individuals and firms will want to participate by investing.
Right now investing in cryptocurrency is really hard. A few months ago Hong and I were trying to create portfolios ourselves but there wasn’t a good way to do it. Researching, buying, storing, and maintaining a portfolio of coins yourself is time consuming and risky. Several hedge funds have recently emerged to do this for you. But they have challenges as well: you have to trust the manager’s judgement, access is not public, minimums are high, and they’re expensive (usually 2–3% fee plus 20–30% of profits).
We talked first with friends and family, and eventually financial advisors, investors, family offices, and individuals, many of whom wanted to invest but felt there wasn’t a good way. After researching solutions, we concluded that there needed to be an organization focused on creating vehicles that make it easier to invest. So we decided to start Bitwise.
We aim to be a trustworthy partner to individuals and professionals seeking to understand, research, or invest in cryptocurrency. We love the details and the opportunity to empower others. And we’re bringing together an exceptional group of people that bridge technology and finance to do it.
We’re looking forward to what’s ahead and we’d love to hear from you.
— Hunter & Hong, Cofounders