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Bitwise launches DeFi Crypto Index Fund, targets institutional investors

Updated: Jul 25, 2024
Published: Feb 18, 2021
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Bitwise Asset Management announced that it is launching what it claims to be the world’s first decentralized (DeFi) Crypto Index Fund.

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The new fund paves way for accredited investors and financial investors to gain exposure to the young but growing world of DeFi.

DeFi Crypto Index Fund

Bitwise is not a newcomer in creating crypto index funds. It is the creator of the Bitwise 10 Crypto Index Fund (OTCQX: BITW), one of the largest crypto index funds in the world with $800 million in assets under management (AUM).

Matt Hougan, the chief investment officer for Bitwise Asset Management said “DeFi is the story of 2021.”

"The growth and activity in the market are incredible. Today there are decentralized trading venues handling over $30 billion in volume per month; automated lending programs making individual loans as large as $200 million; and the total estimated value of funds currently locked into DeFi-related contracts recently crossed $40 billion."
The fund’s crypto holdings are rebalanced every month, screened for important risks, and weighted by market cap.

Fund allocation

The fund consists of nine initial constituents. Uniswap and Aave have weightings of more than 20% while Synthetix and Maker trail behind with weightings of 11.8% and 10.67% respectively.

Compound, UMA, Yearn.Finance, Ox, and Loopring all weigh below 10%.

Anchorage Digital Bank, N.A., is the custodian of the Fund. Anchorage made history in January when it became the first federally chartered digital asset bank in the U.S. and it now has more than $5 billion in cryptoassets under custody.

Anchorage founder and president Diogo Monica said the DeFi sector is growing exponentially.

“DeFi is happening now, every day, and the growth is exponential. As the first national digital bank, we're here to enable its broader adoption as a qualified custodian. We're happy to enable more DeFi participation through Bitwise's new fund.”

Who oversees the Fund?

The Fund will be guided by Bitwise’s public methodology as well as an advisory council comprising experts in the DeFi sector.

The five members of the council are Michael Anderson of Framework Ventures, Ben Forman of ParaFi Capital, Avichal Garg of Electric Capital, Aleks Larsen of Blockchain Capital, and Scott Lewis of DeFi Pulse.

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