Cryptocurrency is increasingly being adopted on Wall Street as a vehicle offering remarkable growth opportunities, and traditional investors are starting to reap the benefits. One of the standout examples is the index fund managed by Bitwise Asset Management, which has delivered a 45% return in its first two full months of operation.
Outstanding Performance During Bull and Bear Phases
Bitwise’s HOLD 10 Private Index Fund, launched in late fall of 2017, has released performance statistics that highlight its resilience and alpha generation. In December’s bull market, Bitcoin posted a 39% gain, while the HOLD 10 surged 78%. In January’s correction, Bitcoin dropped 27%, yet the fund declined only 18%, demonstrating the advantage of a diversified crypto basket.
CEO Hunter Horsley told Bitcoin.com that the fund has accepted several hundred investors since launch, ranging from doctors and professors to family offices and billionaires. Due to private fund regulations, the vehicle is currently limited to accredited investors — those with a net worth of at least $1,000,000 excluding their primary residence. Bitwise aims to eventually serve a broader audience.
Low Correlation to Traditional Assets
For portfolio diversification, the HOLD 10 Index offers nearly negligible correlation to traditional asset classes. Back-tested over the trailing 12 months, the fund shows a 10.8% correlation to the S&P 500, a -5.9% correlation to the Bloomberg Barclays US Aggregate Bond Index, and a -1.6% correlation to gold. This makes it an effective hedge against conventional market moves.
As of its February 1 rebalance, the fund holds BTC, ETH, BCH, XRP, DASH, LTC, XMR, EOS, XLM, and NEO — covering major cryptocurrencies with a rules-based weighting methodology that reduces single-coin volatility.
ETF Expert Joins the Team
In a move that underscores crypto’s growing mainstream acceptance, Bitwise announced the hiring of Matt Hougan as Vice President of R&D. Hougan is the author of a seminal book on ETFs and was previously CEO of Inside ETFs and ETF.com. His expertise in indexing and exchange-traded products will complement Bitwise’s software-driven approach.
Spencer Bogart, partner at Blockchain Capital (an investor in Bitwise), commented: “As crypto-assets come into the mainstream, investors increasingly want access to rules-based beta options. Matt’s expertise in indexing, exchange-traded products, and institutional research complements the team’s expertise in software, and will help Bitwise continue to be a best-in-class partner to investors.”
The combination of strong fund performance, low correlation, and top-tier talent signals that cryptocurrency is no longer a fringe asset class. With more Wall Street players and regulators paying attention, products like Bitwise’s index fund may soon become standard offerings for a wider range of investors.