The new fund is open today (Feb. 17), enabling accredited investors and financial advisors to gain diversified exposure to the fast-growing sector of the crypto market.
Bitwise Asset Management, creator of the world’s largest crypto index fund, the $800 million AUM Bitwise 10 Crypto Index Fund, today announced the launch of the Bitwise DeFi Crypto Index Fund.
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Decentralized finance (“DeFi”) refers to the emerging category of digital, peer-to-peer financial services technologies that enable trading, loans, interest accounts, and more. Using public blockchains and cryptoassets rather than legacy systems, DeFi services aim to cut out traditional Wall Street intermediaries, allowing for the potential to facilitate faster operation, 24/7 availability, no minimums or paperwork, full transparency, and auditability.
“DeFi is the story of 2021,” said Matt Hougan, chief investment officer for Bitwise Asset Management. “The growth and activity in the market is incredible. Today there are decentralized trading venues handling over $30 billion in volume per month; automated lending programs making individual loans as large as $200 million; and the total estimated value of funds currently locked into DeFi-related contracts recently crossed $40 billion.”
The new Bitwise fund holds a portfolio of cryptoassets that power these DeFi services, and seeks to track the Bitwise Decentralized Finance Crypto Index. Holdings are screened for important risks, weighted by market capitalization, and rebalanced monthly.
The formal index methodology is public, and is overseen and adjusted on an ongoing basis by the Bitwise Crypto Index Committee.
The Bitwise Crypto Index Committee is supported by the Bitwise Decentralized Finance Advisory Council, a group of industry-leading DeFi experts who provide insights on the emerging sector.
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The Advisory Council features:
- Michael Anderson, Managing Partner, Framework Ventures
- Ben Forman, Managing Partner, ParaFi Capital
- Avichal Garg, Managing Partner, Electric Capital
- Aleks Larsen, Venture Investor, Blockchain Capital
- Scott Lewis, Founder, DeFi Pulse
Initial constituents and weights of the Index as of 4 p.m. ET on Feb. 16, 2021, were:
| Asset | Ticker | Category | Weight |
| Uniswap | UNI | Exchange | 25.14% |
| Aave | AAVE | Lending | 23.37% |
| Synthetix | SNX | Derivatives | 11.80% |
| Maker | MKR | Lending | 10.67% |
| Compound | COMP | Lending | 8.73% |
| UMA | UMA | Derivatives | 6.16% |
| Yearn.Finance | YFI | Asset Management | 5.47% |
| 0x | ZRX | Exchange | 5.07% |
| Loopring | LRC | Exchange | 3.60% |
The Fund’s custodian is Anchorage Digital Bank, N.A., which became the first federally chartered digital asset bank in U.S. history in January, and today secures over $5 billion in cryptoassets.
“DeFi is happening now, every day, and the growth is exponential. As the first national digital bank, we’re here to enable its broader adoption as a qualified custodian. We’re happy to enable more DeFi participation through Bitwise’s new fund,” said Diogo Mónica, president and co-founder of Anchorage Digital.
The Fund’s expense ratio is 2.5%, which includes costs related to custody, tax, accounting, and management fees. In the future, the fund may seek to facilitate public trading of shares in a secondary market.
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