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Investing in highly volatile assets, like crypto or tech stocks? One way smart investors protect such investments is by diversifying their portfolios. This means, not overindulging in one cryptocurrency, one sector, or one asset.
That’s why BITW or the Bitwise 10 Crypto Index Fund is an interesting crypto fund to look at. With this index fund, investors get exposure to all the top cryptos. Keep reading to learn more about Bitwise Asset Management’s BITW stock.
Bitwise 10 Crypto Index Fund Portfolio
The BITW or the Bitwise 10 Crypto Index Fund seeks to track the Bitwise 10 Large Cap Crypto Index. Using this index fund, you get exposure to the top cryptocurrencies in the market.
The index is weighted by market cap and collectively represents 70% of the crypto market using the top 10 cryptocurrencies. Here are the details on the BITW ETF holdings as of August 2, 2022:
- Bitcoin – 62.8%
- Ethereum – 27.8%
- Cardano – 2.5%
- Solana – 2%
- Polkadot – 1.3%
- Polygon – 1%
- Avalanche – 0.9%
- Litecoin – 0.6%
- Uniswap – 0.5%
- Chainlink – 0.5%
As you can see, the fund is heavily weighted towards Bitcoin and Ethereum, two of the most stable cryptos in the market. See Bitwise’s official page for the latest fund diversification: https://bitwiseinvestments.com/crypto-funds/bitw
Fund Basics
The fund gives secured and diversified exposure to the leading cryptocurrencies. It’s also screened and monitored for risks, weighted for market capitalization, and gets rebalanced monthly.
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This means that if Bitcoin gets particularly pricey or some other cryptocurrency gets a heavier share of the market cap, the investor’s risk will still be modulated.
Fund Details
Bitwise believes that the top 10 cryptocurrencies are a sufficient way of getting exposure to the entire cryptocurrency asset market since the top 10 cryptos represent 80% of the total cryptocurrency market.
Diversification – it’s the holy grail of investing in anything nowadays. No investor wants to be overexposed to one particular investment vehicle, whatever it might be.
Unfortunately, too many investors have overindulged in one cryptocurrency or another, maybe because they believed in the philosophy behind it or some other unknown reason. This could result in a big loss if the cryptocurrency goes south or has a big dip in its price.
A newbie investor also might have difficulty purchasing each cryptocurrency bit by bit. Bitwise could potentially help an investor get their hands and feet into the crypto market at once by buying just one index fund.
Security is also not an issue with this fund, as the fund’s assets are securely held by one of the leading crypto asset custodians in the world. Also, Bitwise is constantly evaluating security developments and updating its best practices to keep all investments safe.
Where to Trade BITW
It’s easy enough to trade BITW nowadays, especially if you have access to a crypto brokerage account. The ticker is easy to remember – “BITW”.
At the time of writing this article, it was trading at 12.13 USD. Estimated Assets Under Management (AUM) is $438 million.
To learn where to trade or buy BITW at the moment check out SEC page.
Returns
The returns for the BITW stock have matched up with the Bitwise 10 Large Cap Crypto Index. Anyone who held it since inception would have more than doubled their investment.
- Since inception (Nov 22nd, 2017) – 117%
- 1 month – 26.8%
- YTD – (negative 55%)
Learn more: Crypto stocks
Bitwise 10 Crypto Index Fund Review
First, keep in mind that any investment into the crypto market is fraught with volatility and is dangerous. Everyone needs to make their own judgment on how much of their investment portfolio should go into cryptocurrency and which ones. It’s an important decision to make and should be handled with care.
Second, the expense ratio for this index fund is a bit higher than normal index funds, at 2.5%. But if you look at crypto-funds in general, this is not as high comparatively. BITW is diversified and competitive if you look at cost alone.
Third, BITW trades at a very high premium compared to the fund’s NAV, but crypto funds tend to do this in general. Some premium to NAV is reasonable, but premiums that are far into the double digits seem far too high. Retail demand is overwhelming for all crypto funds which is why they also trade at such a high NAV premium.
Methodology
Of course, everyone is going to have a different viewpoint of whether cryptocurrency is a good add-on to the rest of their investment portfolio. We can’t answer the question of whether you should be investing in BITW or not. Everyone must make that judgment themselves.
Also, more and more cryptocurrencies are getting released every month with more than 20,000 cryptocurrencies in the market currently. So it can get confusing for an investor interested in the cryptocurrency market.
Retail investors who are beginners to the crypto market and unsure of which cryptocurrencies to invest in, could potentially take a look at BITW.
Don’t try to gauge the market or time it. That doesn’t work, no matter what anyone believes.
Slow and steady wins the game, especially in crypto. Invest a little bit every week or every month. That will help investors take advantage of dollar-cost averaging.
BITW – A Crypto ETF
BITW or the Bitwise 10 crypto index fund is an interesting crypto ETF that investors should keep an eye on.
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