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Hedge funds and institutional investment demand continue to increase, with Bitwise's cryptocurrency fund surpassing a net worth of over $100 million.

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Hedge funds and institutional investment demand continue to increase, with Bitwise

The cryptocurrency asset management company Bitwise has stated that despite the significant volatility in the cryptocurrency market, institutional investors seem more interested than ever in holding Bitcoin for the long term. The total value of assets managed by its "Bitwise Top 10 Crypto Index Fund" has surpassed $100 million.

Bitwise Cryptocurrency Fund Surpasses $100 Million in Net Asset Value

Cryptocurrency asset management firm Bitwise announced in a tweet yesterday that the total assets under management for its "Bitwise 10 Crypto Index Fund" have exceeded $100 million. The fund is designed to track the price movements of the top 10 cryptocurrency assets in the market, including Bitcoin, Ethereum, and Litecoin. Currently, the fund is only available for accredited investors through private placements, but according to Bitwise, the fund is expected to be open for public trading later this quarter.

As Bitwise is an asset management company that caters to accredited investors, the growth of the cryptocurrency fund they offer is directly related to institutional investors' interest in cryptocurrencies. Bitwise's Chief Investment Officer, Matt Hougan, stated:

"2020 has been the year that professional investors overcame the barriers to entry in the cryptocurrency market. PayPal's decision last week to embrace cryptocurrencies was a landmark decision. The barriers that have historically kept professional investors on the sidelines—regulatory concerns, custody issues, reputation, and understanding—have all been dismantled this year."

Furthermore, Matt Hougan also mentioned that in the current macroeconomic uncertainty, the risk-adjusted return potential of cryptocurrencies in investment portfolios cannot be ignored.

Rising Interest from Traditional Institutions

A report released by cryptocurrency derivatives exchange ZUBR in September this year showed that despite the significant volatility in cryptocurrencies, institutional investors seem more interested in holding Bitcoin for the long term than ever before. More and more traditional financial institutions are beginning to recognize this trend and even plan to expand their business services into the cryptocurrency space. According to previous reports, DBS Bank plans to launch a digital asset trading platform – DBS Digital Exchange, providing customers with channels to buy and sell fiat currencies and four digital currencies: BTC, BCH, ETH, and XRP.

Hunter Horsley, CEO of Bitwise, mentioned that when Bitwise was founded in 2017, most of their clients were individual investors, but the landscape has since changed significantly.

"Today, we find the most demand coming from registered investment advisors, financial advisors, family offices, and hedge funds. The recent entries into the market by companies like PayPal, Square, Fidelity, CME, and Nomura have made even the most cautious investors realize they should re-evaluate cryptocurrencies now."

In addition to the "Bitwise 10 Crypto Index Fund," Bitwise has been actively seeking approval from the U.S. Securities and Exchange Commission (SEC) for a Bitcoin index exchange-traded fund (ETF). However, the listing date remains uncertain due to regulatory hurdles, but the increasing demand for cryptocurrency assets from traditional financial institutions may help change their perspectives.