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Bitwise Launches First DeFi Index Fund for Accredited Investors

Key facts:

The firm assures that DeFi services will eliminate intermediaries from Wall Street.

Anchorage Digital Bank, NA is the custodian of the Bitwise Cryptocurrency Index.

Bitwise Asset Management firm, a top-tier crypto fund manager, announced the launch of the first decentralized finance fund (DeFi).

Through a statement dated February 17, 2021, the company explains that the new Bitwise fund has a portfolio based on the cryptocurrencies that power DeFi services and seeks to follow the Bitwise decentralized finance crypto index. Positions are screened for significant risks, weighted by market capitalization, and rebalanced monthly.

Bitwise’s Decentralized Finance Advisory Council will support the firm’s crypto index committee. The document assures that the Council is made up of a group of experts in DeFi, leaders in the industry who offer information on the emerging sector. Currently, the fund’s expense ratio is 2.5%. This includes expenses related to taxes, custody, accounting, and management fees.

The San Francisco, California-based company notes in the text that decentralized finance refers to the emerging category of peer-to-peer financial digital technologies that enable commerce, interest-bearing loans and more. This can be achieved using public and cryptoactive blockchains instead of legacy systems.

Anchorage Digital Bank, NA is the custodian of the Bitwise Crypto Index. Anchorage received its federal license last January, to operate as a digital asset bank. Thereafter, Anchorage secures nearly $ 5 billion in cryptocurrency.

The statement adds that the fund is now available to accredited investors as a private placement, and is open for subscriptions.

Purpose of the DeFi crypto fund

The firm explains that DeFi services aim to eliminate traditional Wall Street intermediaries, which allows to facilitate faster operation, with availability 24 hours, 7 days a week, without minimums or paperwork, with total transparency and auditability.

What’s more, Bitwise is the world’s largest crypto index fund provider, with more than $ 800 million in assets under management for the Bitwise 10 Crypto Index Fund.

The launch of the new Indexed Fund comes at a time when the DeFi market has seen explosive growth. According to data supplied by defipulse.com from December 2020 to February 2021, the total capitalization of the DeFi market is 42 billion. At this point, investor interest is also at its peak.

There is close to USD 42 billion deposited on DeFi platforms. Source: defipulse.com

DeFi designates a set of financial applications based on blockchain networks, which initially do not need intermediaries to function. The DeFi ecosystem seeks to challenge legacy systems and harness the power of the blockchain and cryptocurrencies. Matt Hougan, chief investment officer at Bitwise Asset Management, said:

DeFi is the story of 2021. The growth and market activity is incredible. Today, there are decentralized trading venues that handle over $ 30 billion in volume per month, automated loan programs that make individual loans as large as $ 200 million; and the total estimated value of funds currently locked in DeFi-related contracts recently crossed $ 40 billion.