The structure allows financial advisors to provide clients with direct ownership of the world’s two largest crypto assets, which represent more than 60% of the total crypto market, through a simple, professionally managed vehicle.
Bitwise Asset Management, the world’s leading crypto index fund manager with more than $1 billion in assets under management, today announced the launch of the firm’s first separately managed account (SMA) offering, helping financial advisors provide their clients with direct ownership of crypto assets. The new strategy will hold equal-weighted positions in Bitcoin and Ethereum and rebalance quarterly, ensuring that investors have balanced exposure to the world’s two largest crypto assets.
The SMA’s exposure to Bitcoin and Ethereum gives investors a compelling way to participate in crypto via two widely held assets with distinct use cases. Bitcoin is the most popular crypto asset and leading store of value, while Ethereum is the top platform for blockchain-based smart contracts at the heart of many fast-growing markets, including decentralized finance (DeFi), stablecoins, and non-fungible tokens (NFTs). Together, the two assets make up more than 60% of the nearly $2 trillion crypto market.1
The Bitwise BTC/ETH Equal Weight SMA strategy is particularly relevant for financial advisors looking to help their clients manage exposure to crypto in concert with their broader investment plans, offering portfolio rebalancing, fee collection and billing, account planning, and integrated reporting in most major portfolio accounting solutions.
“In crypto, what you’re invested in is critical, but perhaps equally important is how you’re invested,” said Bitwise Chief Distribution Officer Mick McLaughlin. “In the conversations we have every day with hundreds of advisors across the country, one thing has become clear: They have a strong desire for a vehicle that both gives their clients smart crypto exposure and fits into their workflows. An intelligently structured SMA strategy is a great solution for many advisors.”
The SMA structure allows individuals to move existing held-away crypto assets from digital wallets to an investment vehicle that can be monitored and reported on by their advisor, without triggering a tax event. Moreover, advisors’ clients retain direct ownership of the assets, which provides greater opportunities for customization and tax-loss harvesting as compared to traditional fund vehicles.2 The strategy is offered through the BITRIA platform, which was recently acquired by Gemini to provide asset managers and advisors with access to the crypto ecosystem.
“Five years ago, few people held crypto, and virtually all who invested did so in digital wallets outside the oversight of a professional,” said Bitwise CEO Hunter Horsley. “But since then, crypto adoption has skyrocketed, which has reinforced the importance of crypto being managed as part of a larger, coordinated plan with professional oversight. With crypto as our sole focus, we at Bitwise strive to provide the broadest suite of strategies and vehicles to help investors access the opportunities in the space in the way best suited to them. We’re excited to add this new strategy today and meet this growing need.”
Bitwise manages a growing suite of investment solutions that help investors gain professionally managed exposure to the crypto market, including exchange-traded funds (ETFs), OTC-traded trusts, private placement funds, and now SMAs. The firm created the first and largest crypto index fund, the Bitwise 10 Crypto Index Fund (OTCQX: BITW), which currently holds $830 million in assets.3 The firm focuses on partnering with investment professionals to help them and their clients understand and access crypto markets strategically. Today, Bitwise serves RIAs, multifamily offices, financial advisors, and other institutional managers, with a nationwide distribution and client service team.
The Bitwise BTC/ETH Equal Weight SMA is available to both accredited and non-accredited investors through their advisors, is not subject to investment minimums, and offers daily liquidity. Client assets will be held directly with Gemini, one of the leading regulated crypto custodians worldwide.
To learn more about the strategy, please click here.
- Source: CoinMarketCap. As of April 20, 2022, Bitcoin and Ethereum had a combined market capitalization of $1.16 trillion, compared to the crypto market’s total market capitalization of $1.92 trillion.
- Bitwise does not offer tax advice. Investors should consult with their own advisors with respect to legal, tax, regulatory, financial, accounting, and similar consequences of investing in any Bitwise product, the suitability of the investment for their portfolios, and other relevant considerations regarding an investment in the Bitwise BTC/ETH Equal Weight SMA.
- As of April 20, 2022.
About Bitwise Asset Management
Based in San Francisco, Bitwise is one of the largest and fastest-growing crypto asset managers. As of March 31, 2022, Bitwise managed $1.2 billion across an expanding suite of investment solutions. The firm is known for managing the world’s largest crypto index fund (OTCQX: BITW) and pioneering products spanning Bitcoin, Ethereum, DeFi, and crypto-focused equity indexes. Bitwise focuses on partnering with financial advisors and investment professionals to provide quality education and research. The team at Bitwise combines expertise in technology with decades of experience in traditional asset management and indexing, coming from firms including BlackRock, Blackstone, Meta, and Google, as well as the U.S. Attorney’s Office. Bitwise is backed by leading institutional investors and asset management executives, and has been profiled in Institutional Investor, CNBC, Barron’s, Bloomberg, and The Wall Street Journal.
Gemini is a platform that allows customers to buy, sell, store, and earn cryptocurrencies like bitcoin, ether, and DeFi tokens. Gemini's simple, reliable, and secure products are built to unlock the next era of financial, creative & personal freedom. Gemini was founded in 2014 by twin brothers Cameron and Tyler Winklevoss.
RISK DISCLOSURE AND IMPORTANT INFORMATION
Bitwise Investment Advisers, LLC (“Bitwise”) is providing this information to sophisticated investment advisory clients (the “Potential Clients”) of investment advisers that are registered with the Securities and Exchange Commission for informational purposes only with respect to a potential opportunity to participate in Bitwise’s digital asset model portfolio strategy (the “Strategy”), which solely includes allocations to Bitcoin and Ethereum. All information provided herein and in the attached materials is subject to the terms and conditions of the definitive documents between Bitwise and the registered investment advisers with respect to the Strategy. This is neither an offer to sell nor a solicitation of an offer to buy securities. Any decision to utilize the Strategy will be made solely by the Potential Clients and their registered investment advisers. Bitwise is not a registered investment adviser and does not provide any advice to Potential Clients with respect to the Strategy, and the Strategy may not be tailored to meet the unique needs or investment objectives of the Potential Client. Bitwise will direct all trading through BITRIA, Inc. and its platform to execute the Strategy and is not responsible for trades, any best execution and similar obligations.
Carefully consider the investment objectives, risk factors, and charges and expenses of any Bitwise investment product before investing. Investing involves risk, including the possible loss of principal. There is no guarantee or assurance that the methodology used by Bitwise or any of the Bitwise investment products will result in any Bitwise investment product achieving positive investment returns or outperforming other investment products. There is no guarantee or assurance that an investor’s investment objectives will be met through an investment into any Bitwise investment product, and an investor may lose money. Investors into any Bitwise investment product should be willing to accept a high degree of volatility in the price of such investment product and the possibility of significant losses. Bitwise investment products involve a substantial degree of risk. Certain products may be limited to investment by accredited investors only.
For certain Bitwise investment products, Bitwise is the index provider. There is no guarantee or assurance that the methodology used to create the index will result in products that track that index achieving positive investment returns or outperforming other investment products. Indices are unmanaged and do not include the effect of fees. One cannot invest directly in an index. Certain of the Bitwise investment products may be subject to the risks associated with investing in crypto assets, including cryptocurrencies and crypto tokens. Because crypto assets are a new technological innovation with a limited history, they are a highly speculative asset. Future regulatory actions or policies may limit the ability to sell, exchange or use a crypto asset. The price of a crypto asset may be impacted by the transactions of a small number of holders of such crypto asset. Crypto assets may decline in popularity, acceptance or use, which may impact their price.
The opinions expressed herein are intended to provide insight or education and are not intended as individual investment advice. Bitwise does not represent that this information is accurate and complete and it should not be relied upon as such. This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any security in particular.
Diversification may not protect against market risk. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future results.
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