By
Temitope Olatunji
April 18th, 2024
The Bitwise Bitcoin Fund grew from $4 million to nearly $9 million over the past year. The increase is boosted by the investors’ fear of inflation.
Bitwise Bitcoin Fund has doubled to nearly $9 million as investors worry over unmanageable inflation. The investors pumped millions into the asset manager’s Bitcoin fund to preserve their assets’ value against inflation.
In 2019, a filing with the U.S. Securities and Exchange Commission (SEC) revealed that the Bitwise Bitcoin Fund reached $4.1 million in investment. Now, the fund has jumped more than twice over the past year.
Bitwise Bitcoin Fund Grows
Referring to the reason behind the increase, Bitwise’s head of research Matthew Hougan told CoinDesk in an email:
“With the unprecedented expansion of the Fed’s balance sheet, the radical amounts of fiscal stimulus, and the Fed’s new and significantly more dovish inflation policy, [Bitwise’s clients] are looking for a hedge.”
In addition, Hougan said, that “Bitcoin is the most efficient hedge” against the ongoing inflation.
Earlier this month, the Federal Reserve declared an inflation target of more than 2%. On the 16th of September, Federal Reserve Chair Jerome Powell said the central bank maintains an easy monetary policy until inflation climbs above the target.
Also, the Federal Reserve revealed plans to further withhold the U.S. Treasury securities and mortgage-backed securities. The plan seeks to “sustain smooth market functioning and help foster accommodative financial conditions.”
Considering the economic status and Bitcoin’s fixed supply of 21 million, many investors see the digital asset as a way to preserve value.
Other Investments in Bitcoin
Many individual and institutional investors, including MicroStrategy Incorporated (NASDAQ: MSTR) Incorporated believe Bitcoin is a dependable store of value. In August, mobile intelligence and mobile software provider MicroStrategy announced 21,454 BTC purchases worth $250 million.
The mobile software provider said the decision is to make Bitcoin its primary treasury reserve asset. Following the announcement, MicroStrategy stock jumped over 9% on the day of the announcement.
A month later, MicroStrategy CEO Michael Saylor announced that the company acquired an additional 16,796 BTC, worth $175 million. In the announcement, the CEO added that MicroStrategy now owns a total of 38,250 BTC. The total BTC held is at an aggregate purchase price of $425 million, including fees and expenses.
In reaction to MicroStrategy’s BTC acquisition, the co-founder and CEO of Gemini Tyler Winklevoss commended MicroStrategy’s decision to own BTC. He added that MicroStrategy understands Bitcoin will survive through the crippling effect of inflation.
Apart from MicroStrategy, Grayscale Investments is also a significant institutional investor in Bitcoin. Over the past seven days, Grayscale purchased 17,000 BTC worth over $182 million based on Bitcoin’s current price. Now, the company owns 45,000 BTC currently worth $4.7 billion.
Furthermore, a Canada-based restaurant Tahinis announced the conversion of its “entire cash” into Bitcoin. Tahinis revealed the move in a tweet on the 18th of August.
Also in August, another Canadian company Snappa said it started purchasing Bitcoin as a reserve asset. Revealing further, the company said a significant portion of its cash is reserved in Bitcoin.