Bitwise’s New Fund Lets Institutions Get Exposure to DeFi

  • Bitwise has today launched a decentralized finance fund.
  • In December of last year, Bitwise launched a fund focused on the top 10 cryptocurrencies.
  • This fund is designed to give investors the chance to diversify their crypto portfolios.

Bitwise Asset Management has announced the launch of the Bitwise DeFi Crypto Fund. Some of the biggest names in the decentralized finance (DeFi) space are included in the Fund’s Index, including Compound, Uniswap and Maker.

Previously, Bitwise launched a crypto fund focused on the top 10 cryptocurrencies. But this new fund will enable institutional investors to access the wider, and more experimental, DeFi market. And if successful, it could drastically encourage institutional awareness of the industry.

The DeFi space is looking to disrupt the traditional finance market, replacing overpaid bankers with automated software,” Bitwise CIO Matthew Hougan told Decrypt, adding, “That is a huge addressable market—measured in trillions of dollars.”

DeFi appeals to investors because of faster operating speeds, 24/7 availability, and the potential for full transparency. But the experimental industry isn’t without its risks.

“DeFi is enormously risky, of course. We expect there to be blow-ups and hacks in the space over time,” Hougan said, adding, “But there is also significant potential and very real growth that deserve people’s attention.”

The Bitwise DeFi Crypto Fund holds a portfolio of cryptocurrencies that power DeFi services. A committee—the Bitwise Crypto Index Committee—oversees and adjusts the fund’s Index.

As of yesterday’s date, the initial constituents of the Index include some of the biggest names in the growing DeFi space, including Compound, Uniswap, Maker and Yearn.Finance.

The two largest constituents of the Index are Aave and Synthetix, which both carry a weight of 20%.

In addition, the fund is supported by the Bitwise Decentralized Finance Advisory Council, which is composed of a group of DeFi experts, including Aleks Larsen, venture investor at Blockchain Capital, and Avichal Garg, managing partner at Electric Capital.

The Fund’s custodian is Anchorage Digital Bank, a federally-chartered digital asset bank in the US.

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