A California asset manager has a cryptocurrency fund that’s up by 50% in 4 months

  • The passive fund managed by California-based Bitwise Asset Management is outpacing bitcoin.
  • The fund is up more than 50% since its inception and now has more than 500 LPs.

Bitwise Asset Management is off to a strong start.

The firm’s HODL fund, which is made up of ten digital assets and weighted by market capitalisation, is up 51% since its inception on November 22, a person familiar with the numbers said. By comparison, bitcoin, the largest cryptocurrency by market capitalisation, is up approximately 13.6% over the same period of time, according to data from CoinMarketCap.

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The fund now has more than 500 LPs, according to the person, including family offices and other accredited investors. Investors are required to invest at least $US10,000.

Since Bitwise launched the fund, Coinbase has announced its intention to enter the cryptocurrency index business with its own fund. The so-called Coinbase Index Fund will give investors access to the four cryptocurrencies listed on Coinbase’s GDAX exchange.

Matt Hougan, a 15-year-long veteran of the exchange-traded fund industry, recently joined Bitwise as VP of research and development, Business Insider previously reported.

Bitcoin soared close to $US20,000 a coin at the end of 2017. But it has been under pressure since the beginning of 2018, fuelled by concerns of a regulatory crackdown in the US and Asia. On top of that, a bitcoin exchange-traded fund, which many thought would help pour retail money into the cryptocurrency, appears to be off the table for at least the first-half of the year.

Still, the number of cryptocurrency-focused hedge funds continues to rise, according to a report by Reuters.

The number of such funds reached a record of 226 funds, up from just 55 at the end of August, financial-technology analytics provider Autonomous NEXT estimates.

“While the softer prices of crypto-assets does create a more difficult environment for investors, I do not think it will pause the influx of funds and other financial institutions building products in the space,” Lex Sokolin, a partner at Autonomous NEXT, told Reuters.