Bitwise Launches New Cryptocurrency Private Index Fund – HOLD 10

Bitwise Asset Management, a San-Francisco based startup headed by AngelList CEO Naval Ravikant, has introduced its first product – Bitwise HOLD 10 Private Index Fund, a new passively managed index fund consisting of the top ten cryptocurrencies.

The fund's founders are Hunter Horsley, an ex-manager of Facebook and Instagram, and a graduate of the Wharton School of Business, and Hong Kim, a former Google employee and an expert on cybersecurity.

“It’s too hard to conveniently and securely own a portfolio of cryptocurrency. We felt [what] needed to exist was a robust index that tracks the large-cap cryptocurrencies and the market as a whole.”

It is noteworthy that the management fee for the fund will only be 2-3% per year. This is very modest compared to the average performance fee of hedge funds that reaches 20-30%.

However, only accredited investors from the United States with an annual income of more than $200,000 or possessing assets with a net worth of more than $1 million, can become participants in HOLD10. From this perspective, the fund resembles the Bitcoin Investment Trust (GBTC) rather than a regular ETF (GBTC is a private placement investment, also available to accredited investors, and allows participants to get exposure to Bitcoin in traditional financial accounts).

Moreover, HOLD 10 will not charge investors with deductions from profits. The minimum threshold for investment is set at $10,000.

“One thing I feel bad about with Metastable (one of Naval’s crypto hedge funds) is its million-dollar minimums, we can’t take many investors, we’re basically full.”

He added that many hedge funds charge high commission but end up acquiring the top currencies anyway.

“I think a low-cost index solution makes sense where an investor can buy in with $50K or $25K and have an index that they wouldn’t have to worry about. It would hopefully be low-cost and constantly rebalanced. It also takes case of the custody problem.”

At the moment, the investment portfolio of HOLD 10 includes the following blockchain-based assets: Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Ripple, Litecoin, Dash, NEO, Zcash, and Monero.

The price will be synchronized according to the following crypto-exchanges: Bitfinex, Bitstamp, GDAX, Gemini, Kraken, Poloniex, and Bittrex. As stipulated by the founders, asset rebalancing will occur monthly.

Bitwise’s team of investors and advisors include Avichal Garg, a part-time partner at Y Combinator, Elad Gil, co-founder of Color Genomics and a former Twitter vice president, and Diogo Monica, security lead at Docker.

Earlier, it was reported that billionaire Mike Novogratz also plans to create a cryptocurrency hedge fund with a starting capital of $500 million.