Bitwise’s 10 Crypto Index Fund outperforms expectations, trades at 369% premium
Bitwise Asset Management has announced that its crypto index trades sold for a much higher premium than the underlying assets they represent. This is coming as Bitcoin blew past the $20k benchmark, giving way for FOMO to set in.
The crypto index fund saw an initial trading volume rise to 369%; a premium that is higher than the value of Bitcoin, Ethereum, and eight other crypto assets that are being held in the fund.
According to its website, BITW provides a secure way for investors to diversify their portfolios to include bitcoin and other leading digital assets.
The fund seeks to hold the 10 most highly valued cryptocurrencies, screened & monitored for certain risks, weighted by market capitalization, and rebalanced monthly.
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According to Bloomberg, the remarkable performance suggests that players in the crypto space such as institutional investors and hedge funds are happy to pay a premium to access these assets through a brokerage rather than buying them directly. However, Kyle Samani, co-founder and managing partner at Multicoin Capital believes that several of these investors are acting in ignorance. He said:
I don’t think they can justify the premium, I just think they don’t know what they’re buying. That’s not justifiable, that’s just ignorance.
He added that people are looking for a reasonably constructed index without fully understanding what it entails.