In brief:
- Bitwise has launched a new Defi crypto index fund for accredited investors to gain exposure to the sector
- The DeFi index includes UNI, AAVE, SNX, MKR, COMP, UMA, YFI, ZRX and LRC in weighted proportions
- The fund’s custodian is Anchorage Digital Bank which is the first federally chartered digital asset bank
Institutional investors can now access DeFi tokens thanks to a new crypto index fund by Bitwise Asset Management. The latter firm is the creator of the Bitwise 10 Crypto Index Fund, which is the largest in the industry with $800 million in Assets Under Management.
According to the official announcement, DeFi ‘is the story of 2021’ and Bitwise wants to provide accredited investors and financial advisors a way to access the various tokens governing the various protocols that have made headlines in the last 12 months.
Matt Hougan, Chief Investment Officer for Bitwise Asset Management, further explained why the time was right for such a DeFi index.
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.
Anchorage Digital Bank, which is a federally chartered digital asset bank, will be the custodian of the new Bitwise DeFi crypto index fund.
UNI, AAVE and SNX Dominate the Bitwise DeFi Crypto Index
The DeFi crypto index has 9 constituents that include the following digital assets and their weighted value in the index.
- Uniswap (UNI) – 25.14%
- Aave (AAVE) – 23.37%
- Synthetix (SNX) – 11.80%
- Maker (MKR) – 10.67%
- Compound (COMP) – 8.73%
- UMA (UMA) – 6.16%
- Yearn.Finance (YFI) – 5.47%
- Ox (ZRX) – 5.07%
- Loopring (LRC) – 3.60%
To note is that the DeFi Crypto Index fund has a 2.5% expense ratio. This amount includes costs related to custody, tax, accounting and management fees. Furthermore, in the future, the fund may seek to facilitate public funding of shares in a secondary market.