Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
Looking at the explosive growth of the DeFi market, index fund manager Bitwise has announced the world’s first DeFi Crypto Index Fund holding a portfolio of crypto assets powering DeFi services.
On Wednesday, February 17, asset management giant Bitwise launched its Bitwise DeFi Crypto Index Fund. This is the world’s crypto index fund that caters to the decentralized finance (DeFi) market. Also, Bitwise is the world’s largest crypto index fund provider with over $800 million in assets under management for the Bitwise 10 Crypto Index Fund (OTCQX: BITW).
The launch of the new Index Fund comes just a time when the DeFi market has registered explosive growth. Since the beginning of 2021, the crypto DeFi market cap has surged a whopping 420% moving past $41 billion. At this point, the investor interest in DeFi is also at its peak.
Decentralized Finance (DeFi) is a rapidly emerging market in the crypto space that facilitates peer-to-peer financial transactions of loans, interest accounts, and much more. The DeFi ecosystem is challenging the legacy systems by leveraging the power of blockchain and crypto assets. Matt Hougan, chief investment officer for Bitwise Asset Management said:
“DeFi is the story of 2021. The growth and activity in the market is incredible. Today there are decentralized trading venues handling over $30 billion in volume per month; automated lending programs making individual loans as large as $200 million; and the total estimated value of funds currently locked into DeFi-related contracts recently crossed $40 billion.”
Bitwise DeFi Crypto Fund Details
The DeFi crypto fund from Bitwise will hold a portfolio of crypto assets that power the DeFi services. All the fund holdings are decided after screening some important parament. The Bitwise Crypto Index Committee also oversees the formal index methodology while adjusting on an ongoing basis.
The Bitwise Decentralized Finance Advisory Council will support the Bitwise crypto index committee. The Council also consists of a group of industry-leading DeFi experts offering insights on the emerging sector. At present, the fund’s expense ratio is 2.5%. This includes costs concerning taxation, custody, accounting, and also management fees.
Anchorage Digital Bank, N.A. is the custodian of the Bitwise DeFi Crypto Index Fund. Anchorage received its federal license last month in January 2021, to operate as a digital asset bank. As of date, Anchorage secures nearly $5 billion in crypto assets. Diogo Mónica, president and co-founder of Anchorage Digital said:
“DeFi is happening now, every day, and the growth is exponential. As the first national digital bank, we’re here to enable its broader adoption as a qualified custodian. We’re happy to enable more DeFi participation through Bitwise’s new fund”.
Additionally, the Bitwise DeFi Crypto Index fund is planning for a public listing in the future. Thus, shares of the fund will be available for trade in the secondary market.