Asset Manager, Coinbase to Launch $500M ‘Bitcoin’ Fund
A $500 million institutional fund focused on Bitcoin is scheduled for launch before year-end by Wilshire Phoenix in tandem with Coinbase Custody.
New York-based investment and asset manager Wilshire Phoenix has teamed up with crypto storage solution Coinbase Custody to launch a $500 million institutional fund focused on Bitcoin. Coinbase Custody is a unit of Coinbase, the world’s largest cryptocurrency exchange.
In a statement, Wilshire Phoenix said the fund, which is structured as a statutory trust, is expected to be launched by year-end and will allow investors exposure to Bitcoin. However, the fund will utilize a novel approach to mitigate some of the challenges involved from the volatile price movements of Bitcoin, unlike similar funds that have exposure to Bitcoin or other cryptocurrencies.
"Coinbase Custody provides Wilshire Phoenix a best in class platform on which to securely store digital assets," Wilshire Phoenix founder and CEO Bill Herrmann said. "They are steadfast in their commitment to implementing and executing solutions for institutional clients as opposed to merely talking about their future plans to do so. We are excited to have Coinbase in our corner, and we look forward to our continued partnership in the months and years to come."
According to Herrmann, the soon-to-be-launched fund allows financial institutions and other investors more convenient access to Bitcoin investment.
He explained that under America’s Generally Accepted Accounting Principles (GAAP), the pricing models of Bitcoin provide specific challenges for financial institutions and investors to purchase and hold the digital currency. However, with the system developed by the partnership, which is currently patent-pending, Herrmann is confident they have found a solution to this vital issue.
He added the fund would refrain from using derivatives or any form of leverage to reach its goals, but rather, limit its counterparty exposure as well as some unnecessary additional fees that are often integrated by fund managers with similar financial products or strategies.
Coinbase Custody Trust general manager Sam McIngvale added: "We’re proud to partner with Wilshire Phoenix to provide institutional-grade, compliant digital-asset custody for its new fund. As a regulated Qualified Custodian and fiduciary, Coinbase Custody will offer Wilshire Phoenix clients' secure storage for not only digital assets, but also the ability to perform GAAP-compliant audits whenever the need arises."
The partnership with Wilshire Phoenix is the latest expansion move by Coinbase.
On Tuesday, Coinbase raised $300 million in a Series E funding round led by Julian Robertson of US-based hedge fund firm Tiger Global. The company’s president and chief operating officer (COO) said the fund would use the fresh capital to bolster its global services.