New products help institutions take exposure to surging bitcoin
A fully insured, low-cost bitcoin tracker fund with institutional-grade custody is the latest effort to build a bridge for mainstream investors into crypto.
Bitcoin has performed strongly this year, with the price up 40% to mid February, as equity markets have been growing increasingly nervous about the impact of coronavirus on top of trade tensions and slowing growth.
New vehicles for institutional investors to take exposure to crypto keep coming. In February, Singapore-based asset manager Stack Funds, which is regulated by the Monetary Authority of Singapore, was marketing a bitcoin tracker fund to accredited Asian and other non-US investors.
For the first time, such a fund comes with full insurance on custody, which is provided by BitGo, with banking facilities from Silvergate, the regulated and listed US bank, and pricing from a third-party valuation agent CoinMetrics.
It will invest long-only, 100% in physical bitcoin and charge a 2.25% management fee, which compares with crypto hedge funds that can charge north of 20% for custody on top of the standard 2% management and 20% performance fees.
Michael Collett, Stack Funds
Many of these diversified crypto hedge funds are doing poorly. Bitcoin has been ripping higher, other cryptos not so much: hence the initial launch of a pure bitcoin tracker.