The fund offers investors a simple, index-based approach to participating in the rapidly growing marketplace for digital art and collectibles.
Bitwise Asset Management, the world’s largest crypto index fund manager with over $1.6 billion in AUM,1 today announced the launch of the Bitwise Blue-Chip NFT Index Fund, a strategy that gives investors broad exposure to the world’s largest and most-established non-fungible token, or NFT, art collections. By offering access to a large cross-section of a new market in a familiar format, the Bitwise Blue-Chip NFT Index Fund is designed for investors intrigued by the NFT market but without the time or desire to participate in periodic auctions or bid on individual pieces of art.
NFTs, or digital proofs of ownership recorded on decentralized blockchains, have galvanized global art markets in recent months. Individual works from well-known NFT collections like CryptoPunks, Bored Ape Yacht Club, and Autoglyphs have sold for millions of dollars at auction houses and attracted intense media interest. Meanwhile, NFT trading volumes spiked to more than $10 billion in the third quarter of 2021.2
“New frontiers in art are rare. Entirely new artistic mediums are even rarer,” said Bitwise CIO Matt Hougan. “NFTs have emerged as the first digitally native medium for owning art and collectibles, with enormous potential for meaning, value, and use in our increasingly digital world. For many investors, that combination spells potential opportunity. The Bitwise Blue-Chip NFT Index Fund seeks to give these investors simple, diversified access to the digital art market’s most valuable collections in a meaningful way.”
The fund will seek to track the Bitwise Blue-Chip NFT Collections Index, a basket of the 10 largest NFT collections weighted by market capitalization,3 with a methodology aimed at optimizing liquidity and price discovery. From its launch, the fund will begin to purchase and hold in custody NFTs from blue-chip collections with a combined total market capitalization of more than $6 billion, including CryptoPunks, Bored Ape Yacht Club, Autoglyphs, Fidenza, VeeFriends, and more.4 Moreover, the fund’s relatively low minimums will give investors the opportunity to share ownership in digital art to which they might not otherwise have access, particularly given the cost, time, and complexity of sourcing and purchasing individual NFTs.
“Since Bitwise launched the world’s first crypto index fund in 2017, our aim has always been to give investors a smart and convenient way to participate in crypto’s growth wherever that leads us,” said Bitwise CEO Hunter Horsley. “And recently it’s become clear that any conversation about crypto’s potential must include NFTs, which are fundamentally changing how we think about not just owning art but property rights in general. Being able to invest in some of the NFT movement’s most defining collections as these evolve is an opportunity we wanted to make available to those who are as compelled by the space as we are.”
The launch of the Bitwise Blue-Chip NFT Index Fund rounds out a year in which Bitwise has created eight other crypto funds — four of which were index-based, including the Bitwise DeFi Index Fund and the Bitwise “ex Bitcoin” Index Fund. Bitwise partners with investment professionals, today serving hundreds of RIAs, financial advisors, multifamily offices, hedge funds, and other institutional investors with a nationwide business development team.
The Bitwise Blue-Chip NFT Index Fund is currently available to accredited investors for private placement subscription with a $25,000 minimum investment and will provide monthly redemptions after an initial lock-up period.
1 As of November 30, 2021
2 DappRadar, “Q3 Industry Report,” October 1, 2021. Available at: https://dappradar.com/blog/dapp-industry-report-q3-2021-overview
3 Calculated by multiplying the number of items in a given collection by the price of its lowest-cost, or “floor,” piece.
4 Data from Bitwise Asset Management.
Risk Disclosure and Important Information
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 and are available only to institutional and individual accredited investors.
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 technology relating to crypto assets and blockchain is new and developing. Currently, there are a limited number of publicly listed or quoted companies for which crypto assets and blockchain technology represent an attributable and significant revenue stream.
NFTs are an extremely new artistic and cultural phenomenon, and interest in such artwork could wane. If the demand for NFT artwork diminishes, the prices of NFT items could be negatively affected. The market for NFTs can be subject to shallow trade volume, extreme hoarding, low liquidity and high bankruptcy risk. NFTs are also subject to risks and challenges associated with intellectual property rights and fraud.
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. Past performance is no guarantee of future results.
Diversification may not protect against market risk. Diversification does not ensure a profit or protect against a loss in a declining market.
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This press release is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal, nor shall there be any sale of any security in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction. The offer and sale of these investment products have not been registered with or approved or disapproved of by the Securities and Exchange Commission or the securities commission or regulatory authority of any state or foreign jurisdiction.
Based in San Francisco, Bitwise is one of the largest and fastest-growing crypto asset managers. As of year-end 2021, Bitwise managed $1.3 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. For more information, visit www.bitwiseinvestments.com.