Wall Street's embrace of cryptocurrencies is accelerating. Bitwise Asset Management's HOLD 10 Private Index Fund delivered a striking 45% return in its first two full months, demonstrating the potential of diversified crypto exposure for traditional investors.
Outstanding Performance in Volatile Markets
According to data released by Bitwise, the HOLD 10 index fund has shown remarkable resilience and upside. During December's bull market, bitcoin rose 39% while the HOLD 10 surged 78%. In January's bear market, bitcoin dropped 27% but the fund declined only 18%. Over the first two months, the net return stood at 45%.
Bitwise CEO Hunter Horsley commented: "Since launch, the fund has accepted several hundred investors, ranging from doctors and professors to family offices and billionaires. Due to regulations on private funds, we're currently only able to serve accredited investors. But our goal is to be able to serve anyone." In the U.S., accredited investors must have a net worth of at least $1 million, excluding primary residence.
Low Correlation Boosts Portfolio Diversification
For diversified portfolio investors, the HOLD 10 Index offers very low correlation to traditional asset classes. Back-tested over the trailing 12 months: 10.8% correlation to the S&P 500, -5.9% to the Bloomberg Barclays US Aggregate Bond Index, and -1.6% to gold. This makes the fund an effective hedge against equity and fixed-income risks.
As of the February 1 re-balance, the fund held ten cryptocurrencies: BTC, ETH, BCH, XRP, DASH, LTC, XMR, EOS, XLM, and NEO. This broad diversification helped cushion losses during the January downturn while capturing upside in bull markets.
ETF Expert Joins to Drive Mainstream Adoption
Bitwise also announced the hiring of Matt Hougan as Vice President of Research and Development. Hougan, formerly CEO of Inside ETFs and ETF.com, is the author of a definitive book on ETFs. His move into crypto signals the asset class's maturation.
Spencer Bogart, partner at Blockchain Capital (an investor in Bitwise), remarked: "As crypto-assets come into the mainstream, investors increasingly want rules-based beta options. Matt's expertise in indexing, exchange-traded products, and institutional research complements the team's software expertise and will help Bitwise continue as a best-in-class partner."
The HOLD 10 fund's early success and the addition of seasoned ETF talent point to a future where cryptocurrency becomes a standard allocation in traditional portfolios, offering both growth and diversification benefits.